Milliman study: Risk management evolving from a control function to a strategic business partner among insurers in Asia
"Risk management is a fundamental responsibility of boards and senior management of insurance companies," said Milliman Principal and Consulting Actuary
A few highlights and insights of the study include:
- Participants in the study have operations in the 12 largest insurance markets in
Asia , with a combined market share of more than 50% in six of those markets. - Senior management and board sponsorship is critical to building a holistic risk culture within the organisation. Integrating strategic risk with KPIs and senior management remuneration will help risk functions evolve.
- Even where senior sponsorship is observed, implementation challenges have resulted in a few risk management processes needing improvement to deliver a more compelling value-added proposition. Only a third of participants' risk functions had evolved into a strategic role.
- Risk authority and responsibilities need to be clearly defined, with risk measurement and management independent from risk-taking functions.
- There is a known shortage of talent with the required technical and actuarial skillsets. Recruitment and training of staff with balanced technical and non-technical "softer" skills was identified as a key challenge. Nearly 90% of the survey participants viewed talent as more critical than technology for investment at their current stage. Two-thirds of the participants have increased risk function budgets over the past year, with most of the investments focused on recruitment and training of staff to fill key skill gaps.
- Greater focus is required in assessing and managing qualitative risks, including reputational and regulatory risks, operational risk, and emerging risks, such as cyber risk.
- There is a widespread need to develop and implement a stress-testing framework beyond regulatory requirements.
A copy of the report is available for download on http://www.milliman.com/insight/2018/Enterprise-risk-management-Global-best-practices-and-key-challenges-in-Asia/.
About Milliman
Milliman is among the world's largest providers of actuarial and related products and services. The firm has consulting practices in healthcare, property & casualty insurance, life insurance and financial services, and employee benefits. Founded in 1947, Milliman is an independent firm with offices in major cities around the globe including multiple offices in
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