Few Insurers Have Strong ERM

[kazh]

Plenty of ERM work in the insurance industry ahead:

S&P Exec Explains Ratings For ERM Practices New York--NU Online News Service, Dec. 17; 2007
Out of 125 insurers and reinsurers, only 5% fall into the “excellent” category for their enterprise risk management practices, while 84% are “adequate,” according to Standard & Poor’s, New York. ... “We would expect a strong ERM company to have control processes for some of their risk that will actually give them competitive advantage in an adverse situation,” he said.

Such a company “either would not be exposed to as many of the negative events that occur in its industry, or when those events happen, it would “not suffer as large a loss because they have some preparation for that,” Ingram explained.

What trips up many companies is the ability to do strategic risk management, or overall risk-reward tradeoff. This is something that in the insurance industry “is only practiced by a small fraction,” Ingram said.
...
Examples of “excellent” ERM companies include Genworth, Manulife and USAA, he said. ...He said that one company, Manulife, had a strong ERM program that was instrumental in moving the company to a Triple-A rating last year.

http://www.lifeandhealthinsurancenew...fe%20Insurance

[triplea]

Originally Posted by kazh

S&P Exec Explains Ratings For ERM Practices New York--NU Online News Service, Dec. 17; 2007
Out of 125 insurers and reinsurers, only 5% fall into the “excellent” category for their enterprise risk management practices, while 84% are “adequate,” according to Standard & Poor’s, New York. ... “We would expect a strong ERM company to have control processes for some of their risk that will actually give them competitive advantage in an adverse situation,” he said.

Such a company “either would not be exposed to as many of the negative events that occur in its industry, or when those events happen, it would “not suffer as large a loss because they have some preparation for that,” Ingram explained.

What trips up many companies is the ability to do strategic risk management, or overall risk-reward tradeoff. This is something that in the insurance industry “is only practiced by a small fraction,” Ingram said.
...
Examples of “excellent” ERM companies include Genworth, Manulife and USAA, he said. ...He said that one company, Manulife, had a strong ERM program that was instrumental in moving the company to a Triple-A rating last year.