Enterprise Risk Management

A risk management approach that totally integrates both financial (i.e., speculative) and event (i.e., pure) risk into one broad program of multiple retentions and high-excess aggregate insurance limits. To date, however, few firms have implemented such a comprehensive program. Nevertheless, companies are increasingly buying multiyear, multiline insurance programs that cover disparate forms of risk (e.g., property and directors and officers liability), which are designed to maximize the benefits of portfolio diversification.