Sovereign Trust Insurance Plc has adopted the Enterprise Risk Management (ERM) Framework in line with the directive of the National Insurance Commission, NAICOM, that all insurance companies in the country should before the end of Year 2011, set in place an ERM machinery as a way of ensuring that the insurance business in the country is professionally anchored on the tenets of international best practice and in alignment with the code of good corporate governance. It is interesting to note that the Board of Directors of Sovereign Trust Insurance Plc has approved the ERM framework for the company as put together by one of the country’s leading management consultants. The implementation of same has commenced in the organisation.

The ERM framework for the insurance industry in Nigeria is meant to be an all-involving process which trickles down from the Board of Directors to the Management and other operatives in the organisation. The ERM framework is designed to permeate the entire operational process of the insurance business in the country.

According to the Head of the Risk Management and Control Department in Sovereign Trust Insurance Plc, Sanni Oladimeji, He said the firm is committed to the implementation of the ERM Framework and that the company’s management will not leave any stone unturned in actualizing the workability of the process which is just new to the Insurance industry in the country. In his words, “We have taken this exercise as important as any other aspect of our business process and we will not relent in ensuring that the business principle of the company is guided by the ERM Framework henceforth.”

The underlying premise of Enterprise Risk Management is that every entity in the business component exists to provide value for its stakeholders. All entities face uncertainty and the challenge for management is to determine the level of uncertainty that can be accepted as it strives to grow stakeholders’ value. Uncertainty presents both risk and opportunity, with the potential to erode or enhance value.