For years, insurance industry experts have talked about enterprise risk management (ERM) programs and their expected results. But all the talk seems to have fallen on deaf ears, as results from a recent survey reveal that even more attention needs to be paid to ERM.

CSC, the American Council of Life Insurers (ACLI) and Towers Watson teamed up to survey ACLI members—large and small life and annuity carriers—on risk management practices. The research centered on identifying and sharing life insurance industry ERM best practices, and ways technology can help those carriers improve processes and get a clearer view of overall risk exposure. The companies then compiled the results into a report, “Is Your Organization at Risk? A Different Look at Enterprise Management."

While half (53%) of the respondents have largely adopted ERM concepts, and begun the establishment of ERM programs with varying levels of activity over the last 12 months, they feel there is plenty of room for improvement, partly through the use of technology.

Despite the survey’s findings that life and annuity insurers haven’t yet fully embraced technology as a useful tool for a variety of ERM activities, respondents indicated a significant increase in technology investment, with some insurers planning ERM IT investment increases of 75% or more in 2010.

“As the market recovers, insurers are intending to ‘up their game’ through investments in better technology and improved risk management practices throughout their enterprise,” says Bob McDonald, principal consultant, CSC’s Life Insurance and Annuity division.

Use of technology varies within organizations. In recent years, software products have begun assisting in an array of ERM activities, ranging from risk reporting to stochastic modeling, according to the report. While some software may be more effective than others, on the surface it appears that the use of technology could enable life and annuity insurers to improve in many of the areas viewed as hindrances to ERM performance.

More than 80% of survey respondents indicated minimal integration of technology components/systems that support risk analysis. The survey also showed that systems are rarely used to aggregate risk information and automate the risk-reporting process. The majority (77%) of respondents use either manual or standalone risk-reporting tools, and the same percentage manually publishes risk reports.

Additionally, 80% of survey respondents rated enterprise data warehouse/centralization of data systems as valuable to ERM. Enterprise reporting environment or portal (78%), grid enablement to perform calculations more rapidly for quicker answers (78%), integration/connectivity with other systems (75%) and process standardization or improvement (67%) also received high ratings.

To access a copy of the report, visit or

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