Given its participation in the Insurance and Reinsurance segments, Grupo Peña Verde’s Corporate Governance incorporates a Comprehensive Risk Management System, through which it seeks to proactively identify all risks that could negatively impact its operation. This system encompasses the objectives, policies and procedures related to comprehensive risk management in line with Grupo Peña Verde’s business plans, as well as the processes and procedures necessary to continuously monitor, manage, measure, control, mitigate and report the risks to which the Group may be exposed on an individual and aggregate basis.
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For this purpose, the Risk Committees of each of the Group’s companies meet on a monthly basis to report the status of the risks to the Senior Management and the Board of Directors, who will decide the course of action to be taken. In this regard, it is essential to maintain optimal communication with:
- i. Risk holders (underwriting, investments, operations, among others);
- ii. The areas responsible for detecting, mitigating, or preventing incidents (administration, reinsurance, systems, among others); and
- iii. Authorities (regulatory, academic, or expert) who can provide new approaches to existing risks or detect new ones.
Although the Group is exposed to different risks, it is unlikely that all of them will occur simultaneously, due to the latent correlation between them. For this reason, the Company classifies each of the risks detected according to their potential impact, as shown below:
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In addition, following the robust risk management that set us apart from our peers, the Boards of Directors of each Company have established an exposure threshold for the following risks:
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However, it is worth mentioning that there are emerging risks with a high degree of uncertainty that may lead to losses that cannot be accurately quantified; therefore, in the event they materialize, they could significantly affect the Company’s solvency and/or jeopardize the execution of its business plan. For this reason, Grupo Peña Verde takes all the measures in its power to minimize as much as possible any potential impact.
A good example of this is climate change, for which the Company has worked tirelessly to adopt the best environmental and social practices, seeking to consolidate its position as a benchmark in Human Rights, Labor Standards, Environment, and Anti-Corruption. Also, following the Company’s firm conviction towards these aspects, since October 2020, the Group has been part of the United Nations Global Compact (the main corporate sustainability initiative in the world).
Finally, during 2021, Grupo Peña Verde completed the first survey and assessment of the operational risks in all the companies that make up the Group (operational risk inventory), identifying 1,074 risks in processes and projects, which is expected to strengthen the management and mitigation of these risks in the Group’s companies.