The Risk and Insurance Management Society Inc. (RIMS) announced the release of its latest executive report, Emerging Risks and Enterprise Risk Management, at RIMS 2010 Annual & Conference & Exhibition in Boston.

The report calls for risk managers to address the potential near- and long-term challenges created by the existence and development of emerging risks in order to protect and generate opportunity for their respective organizations.

RIMS’ emphasizes that a dialogue about emerging risks is necessary to continue the evolution of the risk management discipline, and to help practitioners and organizations achieve full value from their investment in ERM. The recent global financial crisis, which was identified early by some risk managers as an emerging risk, raised many serious questions, some of which focused on the effectiveness of risk management practices and, more specifically, ERM.

The report helps risk managers to address these concerns by illustrating how to balance emerging risks with internal and better-known issues; why external risks should be taken seriously and not overlooked as mere macro-level global issues; steps to identify the interconnectedness of various risk factors, including emerging risks. Other topics covered within the report include the characteristics of emerging risks and best practices for identifying and assessing them.

“Today’s risk managers have an extensive toolkit from which to draw to address developing macro-level trends and micro-level organizational issues,” says Pete Fahrenthold, chair of RIMS ERM Committee and managing director of risk management for Continental Airlines Inc. “The key to properly addressing emerging risks is applying these tools and techniques in new areas and considering not only known risks but the long-term impact of emerging risks on organizational objectives. Risk managers need to look for the deeply rooted emerging risks of which well-understood risks may be a symptom.”

The various characteristics of emerging risks are identified in the new report, which also describes best practices for addressing them, such as:

•    Conduct emerging risk reviews

•    Integrate emerging risk reviews into the strategic planning process

•    Identify all assumptions and carry out disciplined assumption testing

•    Challenge conventional thought processes and expectations

•    Apply new and developing methodologies to better understand and predict risk

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