Thursday, 28 November 2013

Accenture Insurance Sector research - Global Risk Management survey

Flood Risk?
A nice generic risk management benchmarking piece from the guys and girls at Accenture came out this week, and after I spent last week at the Leicester rugby game, I was happy to see another 15 "tigers", albeit this time scattered throughout the survey paper itself, presumably as a subtle metaphor for "death by tiger" risk...

It is made up of 98 C-suite respondents (nicely spread across disciplines), is Insurance sector-specific, and Global in coverage (one-third Europe, half N.America), so should be useful to any reader for trend-spotting and Board briefing.

From the document itself, I've pulled out the following;

Risk Governance
  • 98% have their "risk management owner" reporting to the CEO
  • 96% have a senior executive (regardless of title) as "risk management owner"
  • 80% have their "risk management owner" report regularly to the Board
  • 55% had a titled CRO
  • A number of those stats (whilst improved since their last survey) are a poor reflection on the Global insurance industry, but perhaps reflect where corporate culture is outside of the EU/US axis
  • Of the governance bodies, I was surprised to see only 60% of Life companies have an operational risk committee
Solvency II/Non EU equivalent legislation-specific
  • Over 80% of Life and P&C respondents seem happy that they are preparing well for their regulatory initiatives (Solvency II or local equivalent).
  • Other than Internal Model development, the main outstanding issues for Life insurers to be prepared for Solvency II/equivalent is IT architecture and Data Management/Integration. For P&C, documenting risk processes and developing a meaningful Use Test are also worrying at least half of respondents.
  • Issues such as training and education, risk culture and risk governance documentation are relatively low on the priority list.
  • Conversely, when asked on a 1-5 scale about specific areas of risk governance, respondents were more positive about their Data preparations than their risk governance - go figure!
  • Use Test preparation remains a laggard throughout.


  • Top external pressure was Legal risk, and by a good distance. Regulatory risks relatively low on the list, perhaps reflecting Europe's low weighting in the quantum surveyed.
  • Risk Management seemingly well integrated with strategic deployment, but not with product development or reward.
  • Poor statistics around embedding risk management into core functions.
  • Two thirds of Life respondents noting that a lack of "early warning capabilities" impedes emerging risk management.
  • Over half of Life companies said investment benefits ("above and beyond" continued compliance with regulations) would come from better reporting and better integration of Risk and Finance.
There is some of the softer stuff on aspirational elements of risk management thinking at the back, but if you just want to check against your peers, you can save that for a rainy day.

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