How Do We Monitor Risk and Identify Opportunities?

At Citizens Property Insurance Corporation, we must manage risk and identify opportunities to reduce that risk. But how do we do that? The answer may surprise you. We accomplish this through our role as “assurance” providers, which involves impartially scrutinizing the business operations, identifying hurdles, and devising opportunities to minimize risk and achieve desired outcomes.

Citizens’ assurance providers include Internal Audit, Inspector General, Enterprise Risk, Internal Control, Compliance, Privacy, and Information Technology Security and Risk.

An assurance provider is:

• A function or entity responsible for assessing and ensuring that the company's processes, systems, controls, and practices adhere to relevant standards, regulations, and best practices.

The primary purpose of an assurance provider is:

• To enhance confidence and trust in the company's operations, financial reporting, and overall performance by independently validating and verifying its activities.

Overall, an assurance provider is:

• An independent and objective assurance to stakeholders that the company is operating effectively, ethically, and in compliance with applicable standards and regulations.

In doing so, we build trust and credibility in the company's operations, which is essential for maintaining its reputation and sustaining long-term success.

What Is Collaborative Assurance?

Working together across different teams is not a bonus in business; it is crucial. This is especially true when it comes to ensuring the company runs smoothly and efficiently and follows the rules. This is where the idea of Collaborative Assurance comes in. It is a straightforward concept: when the different assurance providers align their viewpoints, avoid duplication or redundant tasks, and identify gaps in coverage, they can protect the business better against potential problems and find opportunities faster.

Who Are Assurance Providers, and What Is Their Focus?

In any organization, different teams have their unique roles. Citizens, like most other companies, follow the ‘Three Lines’ model in identifying where assurance is positioned. The model also continues to serve as the backbone of Collaborative Assurance, clarifying organizational roles:

• First Line: Operational managers and staff directly involved in risk management and control. These are our subject matter experts, the professionals conducting the day-to-day work on a specific function and are responsible for the business process.
• Second Line: Specialist groups providing frameworks for risk assessment, reporting, and oversight, such as Enterprise Risk and Compliance. These professionals are not typically responsible for the business process or function, but they have expertise in risk management, evaluating risk, identifying controls, and process evaluation. At Citizens, these include Enterprise Risk, Internal Control, Compliance, Privacy, Information Technology Security and Risk
• Third Line: Independent evaluators like Internal Audit and the Inspector General deliver unbiased risk management and control mechanisms assessments. Citizens’ Internal Audit and the Inspector General are the Third Line.

Each of these groups has its responsibilities, but in some instances, focus, scope, goals, and execution overlap, which creates opportunities to improve value and impact through collaboration and cooperation.?

Why Collaborative Assurance Matters

At its core, Collaborative Assurance aims to weave a tapestry of collaboration among internal assurance providers. This collaborative network operates on transparency, sharing knowledge and resources to bolster the organization's ability to efficiently manage risks and identify opportunities.

Key pillars of a successful Collaborative Assurance environment Include:

• Shared goals: Uniting all teams under common risk management objectives.
• Open dialogue: Cultivating continuous exchange of information across departments.
• Synchronized planning: Harmonizing risk assessments and assurance efforts to eliminate redundancy.
• Interdisciplinary teams: Leveraging diverse expertise and perspectives through cross-functional teamwork, promoting efficiency, enhanced problem-solving, and a culture of collective responsibility.
• Leveraging technology: Employing technology as a tool for easier collaboration and data sharing.

Getting Started

Bringing teams together for Collaborative Assurance can be simple. It starts with encouraging open communication and regular meetings where teams can share their work and discuss potential risks. It is also helpful to use technology that makes sharing information easy and keeps everyone updated on what happens in various parts of the company.

Conducted quarterly, the assurance coordination meetings (ACMs) play a pivotal role in cementing collaborative efforts among different assurance providers. These meetings offer a platform to bridge the gaps by discussing recent activities, aligning risk perceptions, and planning future assurance actions. Such coordination is crucial for ensuring that the assurance activities are well-aligned, efficient, and devoid of unnecessary overlap.

In Summary

Collaborative Assurance is about recognizing that everyone is on the same team in business. By working together, sharing insights, and supporting each other, Citizens can navigate challenges more effectively and seize opportunities they might not have seen otherwise. It is a simple but powerful way to make us more robust and prepared for the future.

Joe Martins is Chief of Internal Audit at Citizens Property Insurance Corporation