Driven by recent market events, the insurance industry is increasing its focus on integrating enterprise risk management into its day-to-day activities–a movement that is creating new challenges for corporate insurance risk managers.

ERM's ultimate goal is shared by all members of the business community. Without strong and healthy insurers, corporations that buy insurance could not operate effectively. Firms would function in a state of uncertainty without the critical backstop insurance offers in the event of catastrophes, which can take many forms.

ERM, however, can be a double-edged sword. It allows insurers to better understand how different types of exposures impact capital needs and forces them to emphasize loss volatility. This understanding, however, means clients with volatile loss experience may not only find an increase in pricing, but also less capacity.

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