Some C-suite executives may feel that the economic crisis put the implementation of ERM on the backburner within their organizations as they worry more about the balance sheet. Others, however, feel the crisis, along with expectations from ratings agencies, has bolstered the urgency of putting ERM into action.
But how have ERM programs within insurance companies performed? According to Towers Watson’s sixth biennial Insurance Industry ERM survey, 58% of respondents were satisfied with their ERM capabilities over the past 18 to 24 months, while 31% were neutral, and 11% were dissatisfied. “There is strong evidence to suggest that considerable year-on-year progress has been made by insurers in their ERM and economic capital development efforts; yet the industry still faces challenges,” said Tricia Guinn, Towers Watson’s managing director of risk and financial services.
Another key finding from the survey is that companies feel there is a lack of available resources or people with the desired level of skill and experience, which has led to slower than expected enhancement of companies’ ERM. In total, staffing challenges were noted by 56% of respondents. It seems companies are ready and willing to embrace ERM, but are slowed by, among other things, a small talent pool of those able to do so.