ERM Reaches 'Critical Mass' Territory

The implementation of enterprise risk management has reached critical mass, shows a new Risk and Insurance Management Society study of more than 1,000 risk professionals.

In RIMS’ last ERM survey, conducted in 2011, ERM had already passed the “tipping point” phenomena, in which a previously rare activity becomes exponentially more common. The tipping point occurs after 15 to 18 percent of a population has caught on to an idea that was once known to only a few forward thinkers.

By 2013, 63 percent of RIMS’ respondents have either a full (21 percent) or partially (42 percent) integrated risk management program—an increase of four points and five points from 2011, respectively. Twenty percent of those who do not currently have an ERM system are looking into designing one by next year.  

Having hit critical mass (an adoption threshold of 60 percent, as defined by sociologist Everett Rogers), the proliferation of ERM will be continued and self-sustaining.

The impetus to create and maintain an enterprise risk management program is coming from within organizations—from board directives (25 percent) and risk managers (17 percent)—rather than the regulatory environment (14 percent), shows the study.

Furthermore, 23 percent of respondents claim their CFO and 20 percent identify their CEO as the primary reviewer of the company’s ERM output, outpacing the 19 percent who said that the management risk committee is solely responsible for drawing conclusions from risk data.

“These results may reflect an increased interest in ERM activities by exec management, including board of directors, to obtain a more holistic view of their organizational risk,” says RIMS.  

Some of the main goals of ERM implementation in 2013 included meeting operational goals (16 percent), eliminating risk silos (13 percent) and increasing company coordination (13 percent).  

While ERM is becoming more widely-adopted, many organizations still have a long road towards refining the practice, and according to RIMS, this is “relatively consistent” with data gathered two years ago. 

Eighty-nine percent of the RIMS survey respondents say they want their risk appetite management practice to mature followed by an almost equal amount who says the same about how their organization uses ERM to uncover risks and opportunities.

Only fourteen percent believe their ERM-based business approach is at the “leadership” level, but as with the adoption curve, after an initial steep learning curve, expertise comes more naturally over time.

About the Author
Anya Khalamayzer,

Anya Khalamayzer,

Anya Khalamayzer is Assistant Editor of Risk for PropertyCasualty360-National Underwriter. Khalamayzer graduated from CUNY Baruch College after intensive internships with Time Out New York Kids and Crain’s Investment News. Keenly interested in environmental science, music and the arts, her articles have been published in Gotham Gazette, Wonkster blog and Ear to Mind magazine. She can be reached at


Resource Center

View All »

Complimentary Case Study: Helping achieve your financial goals By:...

Find out how a Special Investigation Union used TLOxp to save the company money and...

Do Your Clients Hold The Right CDL License?

Learn about the various classes of CDL Licenses and the industries that are impacted by...

Integrated Content & Communications: A Key Business Issue For Insurers

Insurers are renewing their focus on top line growth, and many are learning that growth...

High Risk Insurance Coverage in the E&S Market

Experts discuss market conditions, trends and projected growth in a rapidly changing niche.

Top E-Signature Security Requirements

This white paper covers the most important security features to look for when evaluating e-signatures...

EPLI Programs Crafted Just For Your Clients

Bring us your restaurant clients, associations and other groups and we’ll help you win more...

Is It Time To Step Up And Own An Agency?

Download this eBook for insight on how to determine if owning an agency is right...

Claims - The Good The Bad And The Ugly

Fraudulent claims cost the industry and the public thousands of dollars in losses. This article...

Leveraging BI for Improved Claims Performance and Results

If claims organizations do not avail themselves of the latest business intelligence (BI) tools, they...

Top 10 Legal Requirements for E-Signatures in Insurance

Want to make sure you’ve covered all your bases when adopting e-signatures? Learn how to...

Risk Management Report eNewsletter

Identify problems involving emerging risks, reinsurance, and business interruption with help from Risk Management Report - FREE. Sign Up Now!

Advertisement. Closing in 15 seconds.