Rating agency demands (71%), financial reporting issues (55%), shifting product preferences (55%) and changes in regulatory requirements (48%) are driving the industry's need for improved risk and capital management practices, according to life insurance company CFOs surveyed by the Tillinghast business of New York-based Towers Perrin in its latest CFO survey.As a result of such pressures, 86% of the CFOs surveyed say they are paying more attention to risk and capital management practices. Four out of five (81%) of the executives polled are going one step further; they are proactively implementing them.

"Many of Alan Greenspan's recent comments on strengthening risk and capital management in the banking industry are transferable to the insurance industry," says Jack Gibson, life insurance and financial services practice leader. "Insurers are strengthening their risk management systems following years of a down equity market, diminished reinsurance capacity and increased regulatory scrutiny, including Sarbanes-Oxley. Implementing more comprehensive risk management practices can help companies be more strategic about the risks that they take in order to achieve an optimum balance between risk and return."

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