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
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
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,
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
•• Implement change management
through education and training.
Highly Important Aspect of ERM
How Towers Watson Can Help
Towers Watson Insurance ERM Solutions
don’t calculate EC
Deciding how to use
EC to improve returns
Two ways insurers expect
ERM to enhance performance
losses that threaten
business viability. 87%
expect added value
investment in ERM.
value with better risk/
return decision making
Define and Monitor
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
••Risk culture is critical to long-term
••ORSA/ICAAP is seen as beneficial
by participants globally.
Key Survey Findings
40%Risk appetite definition