Insurers Want to Know: Does Enterprise Risk Management Add Value?

July 23, 2007

  • July 23, 2007 at 9:37 am
    craig says:
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    I think the question around ERM “creating value” is more along the lines of whether ERM is something real or if it’s just the buzzword du jour.

    Nobody is against what ERM purports to do (save an entity from disaster). But some people question whether the methodology used does anything. Are there more efficient ways of getting the same thing done? Would the methods proposed avert disaster in the event of a “perfect storm” scenario?

  • July 23, 2007 at 12:54 pm
    Pat Beranger says:
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    ERM isn’t just about creating value – it’s about sustaining value. To put it strictly in terms of creating value suggests there is a cost-benefit model that will determine its future in the organization. Just my opinion, but ERM is a lot like an effective performance review. You can spend tons of time, money and energy into devising the perfect model, or you can realize the real benefit is in regular discussion, recognition of strengths and weaknesses, and identification of appropriate actions.

  • August 2, 2007 at 10:37 am
    Mark Bigelow says:
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    I think the process of ERM adds value in a couple of ways. First, by being able to see the company holistically, it’s easier to predict the perfect storms.

    Second, in the process of doing a risk assessment, with an enterprise-wide perspective, you can see where an innovative solution (or treatment, to use the lingo) is needed and help facilitate it’s creation. By knowing who in the enterprise needs to be involved, you can make sure it happens and that it happens the right way. We’ve benefited from that during our risk assessments.



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