2012 Global Insurance Enterprise Risk Management (ERM) Survey Infographic - Towers Watson


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This infographic highlights current progress, priorities and challenges insurers need to keep in mind.

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2012 Global Insurance Enterprise Risk Management (ERM) Survey Infographic - Towers Watson

  1. 1. Insurance ERM Keep Your Eye on the Prize Get More Value From ERM ERM is about generating value. When developing ERM capabilities, insurers need to keep their eye firmly on this prize. Towers Watson’s 2012 Global Insurance ERM Survey highlights current progress, priorities and challenges as insurers make their way on this journey. Insurers See the Value in ERM Key Priorities for ERM Success Build a Strong Risk Culture Aligning day-to-day behaviors with a company’s risk approach ranked number one for long-term success, far above all other ERM aspects. Risk Culture Matters Most, Long Term Get More Out of Economic Capital — Use It! Economic capital (EC) leads to greater satisfaction with ERM, but there are challenges when using it. Challenges to Using EC Create Real Change •• Encourage behavior through incentives linked to risk-based performance metrics. •• Implement change management through education and training. Highly Important Aspect of ERM 80% How Towers Watson Can Help Risk Framework Design and Review Risk Organization, Governance and Culture Risk-Based Financial and Capital Management Economic Capital and Internal Capital Models Asset Risk Management and ALM Insurance Risk Management Operational Risk Management Risk Software Solutions Towers Watson Insurance ERM Solutions Companies that don’t calculate EC Companies that calculate EC 61%satisfied 39%satisfied Management buy-in Robustness of results Methodology Deciding how to use EC to improve returns 62% 61% 58% 56% 59% 201047% 2008 74% 2012 Two ways insurers expect ERM to enhance performance Invest to add value 78% Avoid surprises. Prevent large losses that threaten business viability. 87% Most participants expect added value from additional investment in ERM. 72% Improve risk/ return decisions. Increase shareholder value with better risk/ return decision making (non-mutual participants). Define and Monitor Risk Appetite Insurers with risk appetite/tolerance statements are almost twice as satisfied with ERM (60%) than those without (34%). Insurers with a framework to demonstrate the consistency of risk limits are even more satisfied with ERM (70%). Top Short-Term ERM Priorities: Risk Appetite and Risk Monitoring Increase in Respondents With Risk Appetite/Tolerance Statements ••Insurers see the value in ERM. ••Those that stay the course reap the rewards. ••Risk culture is critical to long-term ERM success. ••ORSA/ICAAP is seen as beneficial by participants globally. Key Survey Findings 40%Risk appetite definition 39%Risk monitoring towerswatson.com/ermsurvey2012