Insurers lacking on broad view of risk management
A new study from the Economist Intelligence Unit (EIU) has warned that not all insurers have been paying sufficient attention to the management of risk exposures throughout their entire organisations.
In a recent report, the analyst concedes that most insurers are managing risk in operational silos; however, the majority of companies surveyed were not looking at the overall picture or tracking interdependencies.
EIU senior editor, Dan Armstrong, comments: “In the wake of the financial crisis, executives are paying more attention to how to aggregate enterprise-wide data and manage their businesses better.”
He believes this is especially true in insurance companies “where there can be an almost paralysing level of complexity and decentralisation”.
However, from information gathered as recently as January, the research revealed that many insurers were short of up-to-the-minute data to support decision-making.
The report’s authors name process complexity, data inconsistency and systems incompatibility as contributors to the problem.
In addition, few companies surveyed showed a true commitment to scenario analysis and regular risk stress-testing.
The study is based on the responses of 58 insurance executives who formed part of a larger survey on governance, risk and compliance.
Category: Insurance News
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