This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Insurers With More Developed ERM Programs Are Seeing A Return On Their Investment, According To Towers Watson Survey

Stocks in this article: TW

North American Highlights

North American insurers included risk monitoring and reporting (52%), risk appetite (38%), and risk limits and controls (37%) as their top improvement priorities, followed by economic capital calculation capability (36%). According to the survey, insurers have made good progress with their risk appetite statements; however, they indicated that significant work remains to make certain their companies’ risk appetite process is embedded in the business. Importantly, less than one-half (46%) of North American participants have an analytical framework in place to ensure that their top-down risk appetite statements align with bottom-up risk limits in the business.

“Many insurers are finding it difficult to operationalize their risk appetite statements. Consequently, companies are beginning to realize the importance of closely aligning their enterprise tolerances with strategic planning and key risk limits, and validating them through economic capital modeling,” said Simpson. “The environment is such that rating agencies are scrutinizing insurers’ risk appetite statements, particularly those that exhibit higher-than-expected earnings and capital volatility.”

Embedding Risk Culture

Respondents agreed the development of a strong risk culture is pivotal for ERM’s success. Insurers in North America rated risk culture (82%) as the most important aspect of their ERM end-state vision, dominating all other factors. Engaging with senior management about aspects of building a robust risk culture has been well established by most insurers, while broader communication and education to foster a common understanding of risk management throughout the organization are top priorities in 2013.

“Linking performance incentives for executives to risk management metrics remain a very powerful method to embed ERM in an organization’s culture,” said Scanlon. “However, our survey indicates little momentum on this front, with more insurers placing higher priority on further developing their ERM framework, and making greater use of economic capital and risk appetite in risk-based decisions before activating risk-based performance measures.”

2 of 4

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 17,804.80 +26.65 0.15%
S&P 500 2,070.65 +9.42 0.46%
NASDAQ 4,765.38 +16.9840 0.36%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs