NU Online News Service, May 4, 2:57 p.m. EST

VANCOUVER, British Columbia—C-suite executives expect risk managers to better explain risks and solutions and become more involved and integrated in daily activities, according to a recent survey.

The survey, “Excellence In Risk Management VIII: Greater Expectations, Greater Opportunities,” released by Marsh at the Risk and Insurance Management Society's annual conference here, finds that an overwhelming number of risk managers say senior management's expectation of their department has grown over the past three years.

“The C-suite expects risk managers to jump into the fold,” says Brian C. Elowe, managing director, Marsh USA Inc., in Boston, Mass. He adds, “Don't wait for an invitation.” For risk managers who are not members of the governance table, this is the time to seize the opportunity, he says.

Panel members at a press conference say that risk managers need to present data and other information in a way that is meaningful to their organization's executives. Risk managers need to explain the risk and the solutions rather than submit pages and pages of data for review, they say.

Pamela G. Rogers, senior vice president, Marsh Risk Consulting in Minneapolis, Minn., explains that expectations for risk managers have changed. Upper management now wants risk managers to be more integrated with their company's operations, have a better understanding of non-insurable risks and be more involved with enterprise risk management.

“There is a gap in what management wants and what they are getting,” she says, adding that risk managers often sell themselves short.

While risk managers are focused on the cost of insurable risk, the cost of claims and everyday operations, senior management expects them to become more effective in executing day-to-day activities using more technology, she says.

When C-suite respondents were asked in what areas expectations have grown:

61 percent say they want to see risk managers integrate deeper with operations.
60 percent say risk managers need to execute day-to-day activities more efficiently.
58 percent say risk managers should do more to lead enterprise-risk-management activities within the organization.
54 percent say risk managers need to provide better quantification and analysis on risk management; develop greater understanding of non-insurance risks; and increase their involvement in the organizations' overall business strategic-planning efforts.

Other significant findings from the survey include:

Strengthening ERM and training/education are the two primary focal areas for developing risk-management capabilities in the coming year, cited by 53 percent and 52 percent of the survey respondents, respectively.
Nearly 60 percent of respondents say their use of data and analytics has changed over the past three years.
Economic conditions rank as the number one risk among respondents for 2011 and are cited as the risk area that respondents expressed the most discomfort over their organizations' ability to manage.
The number of respondents reporting they have a cross-functional risk committee increased significantly over the past year, from 47 percent to 62 percent. Only 30 percent of respondents, however, describe their risk committees as “very effective.”

The survey was compiled from online responses received during the first quarter of 2011 from 1,022 risk managers and C-suite, finance and other executives involved in risk-related functions, according to Marsh.

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