Insurers are making strides when it comes to enterprise risk management but challenges remain, a new study finds.

At the behest of Cary, N.C.-based SAS Institute Inc., the London-based Economist Intelligence Unit (EIU) interviewed 346 senior risk management executives in the financial services industry.

The results show increasingly optimism about their risk management practices, with 60% of respondents indicating that their company has a clear risk strategy.

However, the study finds that regulatory compliance may distract attention from emerging risks while the prevalence of a silo-based approach at several organizations hampers risk management across the enterprise. Indeed, fewer than half of respondents indicated that they understand how risks interact across business lines. More troubling, only 39 % of respondents believe they are effectively collecting, storing and aggregating data. 

The study also found communication problems, with 47 % of respondents saying they can provide timely and relevant risk reports to their boards.

“Financial institutions need to respond to evolving opportunities and challenges in risk management and effect change that impacts both staff and systems across group and business lines,” says David Rogers, SAS Global Product Marketing Manager for Risk. “Progress requires an integrated risk data infrastructure with timely access, the ability to measure exposure and risk across all risk types and books of business, and incentive distribution for consistent optimization of risk-adjusted returns throughout the organization.”

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