Marsh-RIMS Survey Finds Risk Managers and Senior Leaders Differ ...

NEW YORK?(BUSINESS WIRE)?

Although risk managers are taking on more strategic roles in their
organizations, a disconnect still exists in many organizations between
how risk managers and senior leaders view the role of risk management,
according to a new survey published by Marsh and RIMS.

An overwhelming majority of risk managers and C-suite executives
responding to the ninth annual Excellence
in Risk Management study agreed that expectations of the risk
management function have increased in recent years. Yet the two groups
differed in their views on whether the role should be primarily
defensive or anticipatory.

C-suite respondents increasingly expect risk managers to be more
involved in their organization?s overall business strategic planning
efforts and to lead enterprise risk management activities. However, when
asked about the C-suite?s increased expectations, most risk managers
believed their priorities to be integrating more deeply with operations,
providing better quantification and analysis on risk management, and
executing daily activities more efficiently.

?The C-suite clearly is telling the risk manager to grab hold of
strategic risk management,? said Brian Elowe, a managing director in
Marsh?s Global Risk Management Division. ?Risk managers who are not
seizing this opportunity should assess the resources they need to help
meet management expectations.?

The report also found that C-suite respondents and risk managers had
differing views on the strategic value of total cost of risk (TCOR)
measurements. Sixty-eight percent of risk managers said that they use
TCOR measurements, but many C-suite respondents did not seem to be aware
of this: 51 percent said that their companies do not measure TCOR. Even
in firms where C-suite respondents understand that TCOR is being
measured, they show little awareness of what goes into the calculation,
an indication of the relatively low value they place on it.

?Measurements such as total cost of risk can bring certain value to risk
management budgeting and benchmarking, but they do not necessarily give
senior leaders the strategic view of risk they are seeking,? said Nowell
Seaman, Manager of Risk Management and Insurance at the University of
Saskatchewan and a member of the RIMS Board of Directors. ?Organizations
are better served when risk managers engage in strategy planning and
strategy execution efforts by developing a formal strategic risk
management framework, and consolidating the disparate emerging risk
communication channels that already exist in organizations.?

Other significant findings from the survey include:

• More than one-third of respondents said that the economic downturn led
  to an increase in the use of analytics in risk management. An almost
  equal number said the downturn increased their companies? focus on
  risk volatility, an important measure of how divergent actual losses
  may be from expected losses.
• The presence of broad-based risk committees at companies held steady
  at just over 60 percent in 2012, after showing a steep rise between
  2010 and 2011. About 40 percent of respondents at companies without a
  cross-functional risk committee say their organizations should create
  such committees.
• Among respondents whose organizations were affected by a natural
  catastrophe in 2011, 75 percent said their company will re-examine its
  approach to a number of risk management areas. More than two-thirds of
  those respondents say that they have already done so.

The survey was compiled from online responses received during the first
quarter of 2012 from 1,322 risk managers, C-suite executives, and others
involved in risk-related functions. Although primarily from North
America, respondents represented companies with headquarters in nearly
50 countries.

Findings from the survey of more than 1,300 risk managers, C-suite
executives, and others were published jointly by Marsh and RIMS and
released today at the RIMS 2012 Annual Conference & Exhibition in
Philadelphia.

Excellence in Risk Management IX: Bridging the Gap is available
on both RIMS.org
and Marsh.com.

About RIMS

As the world?s preeminent organization dedicated to advancing the
practice of risk management, the Risk and Insurance Management Society,
Inc. (RIMS) is a not-for-profit organization representing more than
3,500 industrial, service, nonprofit, charitable and government entities
globally. Founded in 1950, RIMS brings networking, professional
development and education opportunities to its membership of more than
10,000 risk management professionals. For more information on RIMS,
visit www.RIMS.org.

About Marsh

Marsh,
a global leader in insurance broking and risk management, teams with its
clients to define, design, and deliver innovative industry-specific
solutions that help them protect their future and thrive. It has
approximately 25,000 colleagues who collaborate to provide advice and
transactional capabilities to clients in over 100 countries. Marsh is a
wholly owned subsidiary of Marsh
& McLennan Companies (NYSE: MMC ? News), a global team of professional
services companies offering clients advice and solutions in the areas of
risk, strategy and human capital. With 52,000 employees worldwide and
annual revenue exceeding $10 billion, Marsh & McLennan Companies is also
the parent company of Guy
Carpenter, a global leader in providing risk and reinsurance
intermediary services; Mercer,
a global leader in?human resource consulting and related services; and Oliver
Wyman, a global leader in management consulting. Follow Marsh on
Twitter @Marsh_Inc.

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