Creating Value through Integrated ERM for Healthcare Insurers in Europe

This paper focuses on value creation for European health insurance companies through the practical application of integrated ERM frameworks. The European dimension is characterised by the range of relationships between health insurance and the public healthcare system (e.g. substitutive, supplementary and complementary forms of health insurance that co-exist in Europe), risk sharing models and the varying nature of market regulation. The health insurer is considered as essentially a system of risk dynamics that consists of market participants that interact with each other. Integrated ERM frameworks (including COSO) are considered with reference to the system of risk dynamics. The associated ERM processes and techniques cover the internal environment, objective setting, event identification, risk assessment, risk response, control activities, information, communication and monitoring. The paper includes specific and practical examples illustrating how an ERM practitioner could apply any proposed approaches and how to communicate them to all levels of a health insurance company in Europe.