FINDINGS

1 Insurance companies have more advanced risk management for more important risks. The survey
reveals that insurance companies acknowledge risks are importantand will become even more
important in the future.
2 In general, the more important a specific risk type, the better the existing risk management
functionin terms of processes, procedures, frameworks and strategies. Similarly, risk profiles
differ among companies in different insurance segmentslife, non-life, or both life and non-life
business. As a result, the calibre of the risk management function for specific risk types also
varies.
3 Results for small insurance companies justify the standard formula in the framework. Risk
management processes, procedures, frameworks and strategies are common across most
insurance companies. However, not surprisingly, large insurance companies are generally better
equipped than small and medium-sized ones.
4 Companies with both life and non-life business are not as advanced in integrated risk
management as those focused solely on life or non-life.
5 Integrated risk management is in place for less then half of insurance companiesa marked
counterpoint to the aspirations of Solvency II. Insurance organisations that are active in both life
and non-life business are likely to be more complex, but the survey shows these companies are
less advanced in managing integrated risks and enterprise-wide risks like operational risk.
6 Business-driven logic is an important engine for improvements in risk management.
Improvements in risk management are primarily being driven by compliance, but business logic
is also a significant engine of change.

SUGGESTIONS

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1 Dont underestimate potential future problems and think of loss prevention and risk transfer
rather than loss financing,. Companies need to assess the types of risks they will face and make
sure their program is tailored to meet these needs.
2 Dont limit insurance expertise to the risk management department.
3 While there may be friction between departments in a company, legal generally recognizes the
beneficial role risk managers play. It added that risk managers need to put any insurance-related
communications in writing and assist in the analysis of policies and claims.
4 Risk managers should purchase coverage with the intent of safeguarding the companys own
property and employees. They also need to recognize which mechanisms actually transfer risk
and which do not.

5 Give notice of a claim or loss as soon as possible. When faced with a claim or loss, McMullen
advised risk managers not to hesitate to notify their broker, insurers and everyone in their tower
of insurance as soon as possible.

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