Risk Management (November 01, 2010)

INSURERS SAY ERM POLICIES CARRIED THEM THROUGH THE FINANCIAL CRISIS

More than half of the insurers surveyed in Towers Watson’s biennial global ERM survey said they were satisfied with their ERM capabilities throughout the financial crisis.

Of the 465 insurance and reinsurance executives surveyed around the world, 58% felt satisfied with their ERM program’s performance over the past 18-24 months. Thirty-one per cent were neutral and 11% were dissatisfied.

More than two-thirds of respondents reported their risk management programs contributed to enhanced business performance in such areas as core risk control technologies and a strengthened risk culture.

The main ERM areas that contributed to improved business performance included:

• management of individual risk exposures (69% of respondents);

• risk monitoring and reporting (65% of respondents);

• risk limits and controls (64% of respondents); and

• the use of economic capital in decision-making (56% of respondents).

The survey also found insurers are increasingly documenting their corporate risk appetites and tolerance levels (47% in 2008 compared to 59% in 2010).