In order to maintain the pace required to proactively identify emerging risks that could affect the organization, we have integrated into our corporate governance the Comprehensive Risk Management System, which includes all the policies, procedures, rules, structures, information systems, and people within the Group that identify, evaluate, monitor, mitigate, and control the risks arising from both external and internal sources, whose effects may have an impact on our operations both individually and in the aggregate.

Comprehensive Risk Management is an ongoing process that involves:

For this reason, the Risk Committees of each of the companies that make up our Group meet on a monthly basis to report the status of the risks to the Senior Management and the Board, who will decide the course of action to be taken. This requires excellent communication with the entities bearing the risks (underwriting, investments, operations, among others) and the areas responsible for detecting, mitigating, or preventing the occurrence of events (administration, reinsurance, systems, among others); as well as with the authorities, whether regulatory, academic, or experts who can provide new approaches to existing risks or the detection of new ones.

We have identified the various risks to which the Group as a whole and its subsidiaries are exposed; however, since it is very unlikely that all these variables will occur under their worst-case scenario simultaneously (given the correlation between them), we have classified these risks based on their potential impact to elaborate on the risk management performed, as shown below:

Additionally, in line with the sound risk management that distinguishes us, the Board has defined an exposure limit for the following risks:

VaR= Value at Risk
OEP- Ocurrente exceedance probability
EOF- Elegible own funds
BEL- Best estimate liabilities

It is important to point out that emerging risks (such as climate change), given their high degree of uncertainty, can generate large losses that cannot be accurately measured; therefore, they could jeopardize our solvency or the execution of our business plan.

For this reason, and with the purpose of being good corporate citizens, we seek to follow the best environmental practices to become a national and regional benchmark in Human Rights, Labor Standards, Environment, and Anti-Corruption. Therefore, since October 2020, we are part of the United Nations Global Compact, the largest corporate sustainability initiative in the world; thus, ratifying our commitment to be sustainable and responsible.

Although, during 2020, Grupo Peña Verde's efforts were largely focused on minimizing COVID-related impacts, we were able to continue moving forward on other fronts: