Enterprise Risk Management (ERM) – 2015 Goals and Strategies
Have you asked yourself how you are going to influence your ERM program for success in the coming year? There are 5 questions that you should ask yourself and your team to eliminate and mitigate key risks with the objective of driving earnings and asset value improvements for your organization.
As a leader of your organization, you are likely trying to catch up from the Holidays and figure out how to guide everyone to produce outstanding results for the coming year. As part of that planning, there are five key questions to consider for mitigating and eliminating risk costs.
1. Do we have consistent, broad organizational goals to "capture" risk for decision-making, with the ultimate objective of increasing earnings and improving asset valuations?
2. Are our goals measured through continuous Risk Profiling, Risk Assessment and Risk Mapping?
3. Do we have state-of-the-art Enterprise Risk Management systems with advanced, real-time analytics?
4. Do we know how our programs are constructed, how they compare with similar businesses, and if they have been optimized for efficiencies?
5. Do we have reporting structures that focus qualified professional service teams with significant experience in Enterprise Risk Management (ERM) to support the existing operations staff?
Most organizations have some form of “renewal” of their insurance programs which tend to be broker driven and involve “in the box” thinking. You fill out the applications and supplemental information, give them to your broker and hope for the best insurance quotes. Then you think about the remaining components of your program and try to cut costs wherever you can to make up the anticipated increases in insurance costs. Does this process sound familiar? Do you think this is the best approach to lower your risk costs? Probably not, but what choice do you have, right?
Try to understand the key drivers of your risk costs, and employ resources to measure the best alternatives to meet your long term risk cost goals before sending the renewal information to your broker. If you are late in the renewal process now, why not lay the foundation this year to meet your objectives for 2016. Contact us to learn more about how innovative quantitative approaches could help you.