International ERM Glossary

The International ERM Glossary is intended to provide users with a set of definitions that are in common usage around the world by actuaries, regulators and members of the insurance industry. The purpose in developing the glossary is to help provide a common understanding of the terms currently in use, as definitions and meanings have varied over time, and among practitioners. It can also be used as a training and educational tool for regulators.

The glossary can be consulted per letter, organization or grouping.

DISCLAIMER: The content of the International ERM Glossary has been compiled by the Joint ORSA Subcommittee of the Insurance Regulation Committee and the Enterprise and Financial Risk Committee of the IAA. This information has been collated and presented for educational and informational purposes to the members of the IAA and interested parties. The IAA assumes no responsibility for the accuracy, completeness, currency, reliability of the information in the International ERM Glossary or access to any information contained on any of the sources cited in the Glossary. The IAA, its employees and officers shall not be liable for any loss or damage, direct or indirect, which may arise or occur as a result of the use of or reliance upon any of the material in the International ERM Glossary.


TermGroupingOrganization or Jurisdiction Defining TermSource of DefinitionDefinition
Risk AppetiteGeneralCOSOCOSOThe types and amount of risk, on a broad level, an organization is willing to accept in pursuit of value.R
Risk AppetiteGeneralFinancial Stability BoardFSB Principles for an Effective Risk AppetiteThe aggregate level and types of risk a financial institution is willing to assume within its risk capacity to achieve its strategic objectives and business plan. R
Risk AppetiteGeneralIAISIAIS Supervisory MaterialThe aggregate level and types of risk an insurer is willing to assume within its risk capacity to achieve its strategic objectives and business plan.R
Risk AppetiteGeneralInternational Actuarial AssociationIAA - Acturial Aspects of ERM for Insurance CompaniesThe level and type of risk that an organization is willing to accept in order to achieve its objectives.R
Risk AppetiteGeneralInternational Actuarial AssociationIAA Deriving Value from ORSAThe level of aggregate risk that a company chooses to take in pursuit of its objectives.R
Risk AppetiteGeneralInternational Risk Management InstituteIRMI TermsThe degree to which an organization's management is willing to accept the uncertainty of loss for a given risk when it has the option to pay a fixed sum to transfer that risk to an insurer.R
Risk AppetiteGeneralUnited StatesNAIC ORSA MANUALDocuments the overall principles that a company follows with respect to risk-taking, given its business strategy, financial soundness objectives and capital resources. Often stated in qualitative terms, a risk appetite defines how an organization weighs strategic decisions and communicates its strategy to key stakeholders with respect to risk-taking. It is designed to enhance management's ability to make informed and effective business decisions while keeping risk exposures within acceptable boundaries.R
Risk AppetiteGeneralUnited StatesU.S. ASB TermsThe level of aggregate risk that an organization chooses to take in pursuit of its objectives.R