Enterprise Risk Management
ERM (Enterprise Risk Management) plays an integral role in how EIM manages our business. As such, the ERM Committee, reporting to the Board of Directors, has defined the Company's risk tolerance policy as follows.
Corporate Risk Tolerance
We have set our corporate risk tolerance at a modeled annual aggregate occurrence 1-in-10 year period with a probable maximum net loss of no more than 20% of prior year's capital. This is the amount of capital on a corporate wide basis that we are willing to put at risk, subject to the above threshold. In other words, according to our modeling there is no more than a 10% chance of losing 20% of last year's capital. The probable maximum net loss is further subject to a required capital floor as determined during the annual capital adequacy study as prepared by our actuaries to maintain an "A" rating by AM Best.