Last week I discussed some of the comprehensive cross-industry results presented in the Report on the Accenture 2011 Global Risk Management Study. For a deeper understanding of the study and its findings, I recommend catching up with last week’s post. This week I would like to focus on specific results for the insurance industry.
For insurers, risk management has always been a core capability—and its importance is underscored by the needs of today’s market. Like their counterparts in other industries, insurance executives believe that robust risk management is critical to drive growth and profitability.
Currently, a large number of insurers consider risk management as a higher priority area compared to two years ago, during the worst of the financial crisis. However, compared to banking and capital markets, insurers are lagging in terms of having a formal ERM program.
The top changes that insurance firms are currently undertaking or considering in next two years to enhance their risk management capabilities are:
- Data management.
- Analytics and risk modeling.
- IT infrastructure.
- Better integration of finance & risk processes through process reengineering and automation.
Compared to other industries, insurance companies are more likely to have risk owners reporting directly to the CEO (88 percent against an overall average of 79 percent across industries). Additionally, the role of chief risk officer (CRO) is becoming increasing important. CROs are being given more risk management authority and independence.
Insurers that seek to enhance their risk management capabilities should:
- Invest in better analytics tools.
- Integrate risk and finance management processes within the organization.
- Better deal with fraud and financial crime.
- Move risk management beyond simply compliance and enable it to be a competitive advantage.
To learn more, download the the Insurance Industry Report on the Accenture 2011 Global Risk Management Study.