The proportion of US companies with enterprise risk management programmes in place has increased only slightly over the past year, despite worldwide attention on the subject, a survey by Towers Watson has revealed.
Research involving 153 risk managers from US companies found 57% of respondents had ERM programmes in place, compared to 54% last year. At the same time, 40% of respondents said nobody had been able to articulate the value of implementing ERM and another 25% said it was too resource-intensive and expensive to implement, regardless of its value.
Corey Gooch, senior corporate ERM consultant at Towers Watson, said: 'Despite ERM receiving more attention worldwide from regulators, policyholders and stockholders, the fact that we only witnessed a slight increase in ERM implementation clearly demonstrates that there is a disconnect between many existing ERM efforts and the value that can ultimately be derived.
'A lot more needs to be done to encourage companies to mature these programs beyond a qualitative or compliance focus. It is evident from our survey that more formal, thorough education about what ERM is and what it can do for companies may be needed.'
The consultancy's research also highlighted concerns over the hardening property and casualty insurance market, with 63% of those questioned saying they were either seriously or moderately concerned about the trend. Another 32% expressed slight concern.
Companies were taking steps to prepare for this, the survey found, with 69% of property respondents marketing their programmes, and 63% casualty respondents doing so.
Towers Watson also found that a third of property respondents were using broker-provided catastrophe modelling, 44% of casualty respondents were using actuary-provided retained loss analytics and 30% were using predictive modelling.
Steve Levene, risk advisory and brokerage practice leader at the company, said use of analytics was a great way for companies to prepare themselves for the prospect of a hardening P&C market.
'This also provides brokers with an opportunity to help their clients better see the linkage between effective analytics and preparation for a hardening market. It is a connection that was not as essential in a soft market, where coverage was more accessible and relatively inexpensive,' he added.