Enterprise risk management (ERM) has moved from a relative rarity just three years ago to common practice among insurers today. At least initially, adoption of ERM for many carriers grew from decisions among rating agencies, especially Standard & Poor's, to include the discipline as a rating category. But other forces also have helped move it forward-terrorist attacks, hurricanes and, more recently, the storms in the financial markets. 

"There were a couple of leading institutions that practiced ERM because they thought it was good business," says Paul Horgan, partner and leader of the Global Insurance Risk and Capital Team at PricewaterhouseCoopers (PWC) in New York. "But in the United States, it wasn't until the rating agencies really upped the bar on ERM two-and-a-half or three years ago that insurers across the board started investing in it."

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