Economic challenges across the globe have spurred companies of all sizes to review their risk profiles, but their subsequent approaches are not necessarily clear cut.

A recent survey, conducted by three insurance organizations in conjunction with the 2009 Enterprise Risk Management (ERM) Symposium held in Chicago in late April, asked actuaries and other risk experts about their risk management decisions. The survey found that 46% of the respondents' organizations have assumed less risk following the recent economic crisis, while 37% made no change in their risk approach. Just 6% of the respondents, however, said their organizations had taken on more risk.

The survey was conducted and hosted by the Society of Actuaries (SOA), Casualty Actuarial Society (CAS), Canadian Institute of Actuaries (CIA) and Professional Risk Managers' International Association (PRMIA). The symposium highlighted the importance of anticipating and managing risk in uncertain economic times. It included information on improving board risk oversight and risk management, emerging risks, economic capital and the current financial market crisis.

Nearly 94% of the survey respondents said ERM is embraced by their senior leadership, but that support may be relatively soft. Of that group, only 26% strongly agreed that senior leadership embraces ERM. And while 70% of respondents said ERM was deeply integrated within their corporate culture, only 18% of them strongly agreed with that assessment. This indicates that more needs to be done to fully integrate ERM into the corporate culture, including more support from leadership, notes the survey findings.

"Given the recent market challenges in mitigating risk, the microscope is focused on ERM like never before," said Max Rudolph, FSA, MAAA, CERA, ERM Symposium chair and owner of Rudolph Financial Consulting LLC. "ERM is not just a cost of doing business. It needs to be a central aspect of any corporation's business strategy, fully integrated throughout the organization." Rudolph noted that actuaries have led the drive to help all types of financial services organizations develop strong ERM programs.

The survey results also found that 56% of respondents ranked financial risk as the most severe concern for their company or clients. Strategic and operational risks were the next two risks of most concern. So what actions are risk professionals taking to mitigate risks?

In the financial risk category, they are hedging, improving analytics, stress testing and enacting internal controls. To alleviate strategic risks, businesses are incorporating a higher level of strategy review and adapting or expanding ERM capabilities. They are also acquiring companies or expanding their own business, as noted by the survey respondents.

"Senior management can take the lead by incorporating ERM into their business strategies to anticipate and manage risk head on," said Rudolph. "With ERM as a core function, businesses can enhance their reputations, ultimately increasing stakeholder value."

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