Tag Archives: Risk Adjusted Returns

A Case Study on Enterprise Risk Management: Allstate Inc.

In 2000, The Allstate Corporation started on an exciting and uncharted new course: to become an early insurance industry adopter of enterprise risk management (ERM). It has been a complex journey that has helped provide a deeper insight into the company’s underlying risk profile, enhanced the way Allstate manages risk in several significant ways and helped generate actions to better exploit risk opportunities.

The company’s initial effort began some years earlier at the direction of then-CFO, Tom Wilson, who established new capital allocation and valuation models for use in the finance function. Later, as Wilson moved into an operating role, John Carl joined Allstate as CFO and asked his staff what the company’s risk-adjusted returns were. A series of conversations resulted in a decision to explore developing a more quantitatively rigorous approach to measuring risk, similar to what was practiced in the oil and gas industry. Click here to read more…

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Case Study for Cardinal Capital Management

Focused Objectives and Investment Philosophy: Cardinal Capital Management’s client base ranges from high net-worth individuals and trusts to corporations, foundations, and endowments. The firm’s objective is “to construct portfolios that are high quality and well-diversified by industry sector with excellent long-term absolute and risk-adjusted returns.”

The building blocks of Cardinal Capital Management’s philosophy are: Create value, Minimize risk, Maintain client focus, Pursue a disciplined analytical approach, Monitor performance, and Promote a culture of teamwork and integrity. The firm follows a “valuation based approach,” selecting stocks that are selling at a low price compared to their observable metrics. The firm addresses portfolio construction with a long-term investment strategy in mind. Keep reading