NU Online News Service, April 17, 1:04 p.m. EST
PHILADELPHIA—Chief executives and risk managers see eye-to-eye on necessary risk-professional skill sets, but gaps remain between how the two view the role of risk managers, a survey says.
Released yesterday, during the 50th annual meeting of the Risk and Insurance Management Society meeting here, the ninth annual Excellence in Risk Management survey from insurance-broker Marsh and RIMS found that risk managers are not meeting the expectations of chief executives (c-suite).
Brian Elowe, a managing director in Marsh’s Global Risk Management Division, says company executives “want the risk manager to dive into that gap” rather than “wait to be asked to step in and fill the gap.”
Nowell Seaman, manager of risk management and insurance at the University of Saskatchewan, and a member of the RIMS board of directors notes that some risk managers “want to take the initiative, but need to know how to do it.”
Among some of the findings of the survey of 1,322 risk managers, top executives and other respondents primarily in North America, 37 percent of risk managers say insurance knowledge is an important knowledge skill while 25 percent of the c-suite executives do not. The reason for that gap, the report reasons, is executives may believe that this is a skill risk managers should already possess.
Another wide gap was in business project and project management experience, where 21 percent of c-suite executives say it is an important skill while only 14 percent of risk managers say it is important.
The report also asked if senior management’s expectations of the risk-management department increased over the past three years.
In this year’s survey, 71 percent of the c-suite executives say it increased, down from 77 percent in the 2011 survey. However, 85 percent of risk managers say the expectation increased, up from 82 percent in 2011.
Other significant findings from the survey include:
- More than one-third of respondents say that the economic downturn led to an increase in the use of analytics in risk management. An almost equal number say 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 say 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.