Recent turmoil in the global, economic, business and geopolitical environment has dramatically increased risk levels across the financial services industry. The need for companies to understand and quantify risk-at the top line aggregated level as well as at the product and division levels-has never been greater.Despite the need to quantify risk and allocate scarce capital resources, a majority of insurers (66%) are less than halfway through implementing holistic risk and capital management frameworks. This is a conclusion of a recent survey conducted by Ernst & Young's Insurance and Actuarial Advisory Services practice.

The most significant challenges, according to the survey respondents, are automation and streamlining, resources, data limitations and cultural buy-in.

Challenges notwithstanding, only 10% of insurers feel the benefits of a sophisticated risk measurement and capital management system are not worth the cost.

When asked about the most significant benefit of a risk measurement system, companies cited the awareness of risk across the organization, adding discipline to the product development and pricing process, and making decisions that would not have been made otherwise.

The survey also showed insurers are beginning to elevate risk to the executive level by appointing a chief risk officer.

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