The Benefits of Investing in a Stronger ERM Program
BY ALISTAIR MACPHERSON
Regardless of industry, people’s understanding of enterprise risk management (erM) varies. Tra-
ditional risk management—without the
“e”—centers on the identification, assess-
ment and mitigation of risk. How does add-
ing the word “enterprise” change things?
as the title suggests, erM covers the
whole organization and includes all sources
of risk. However, it only very subtly hints
that erM can be strategic. erM is more
than just minimizing the downside—it is a
way for organizations to seize opportunities
to protect and even create value.
With that in mind, what are some of
the benefits effective erM can provide in
the short-term?
ratings-agency scrutiny of insurers’ erM
capabilities has already started. a favorable
report—or at the bare minimum, the
avoidance of a downgrade—is desirable.
That said, the extent to which insurers
leverage the work they perform for ratings
agencies for their longer-term benefit is
open to question. In an economy in which
systemic risk is in the headlines, proactively
identifying and responding to risk—and,
more importantly, developing a risk-focused
culture—as well as communicating positive
outcomes to stakeholders can only benefit
an organization.
In addition, regulators soon will
require many insurers to produce
additional risk and solvency reporting
through, for example, an own risk
and solvency assessment (orsa) or
Commercial Insurer’s solvency self-assessment (CIssa).
To date, the requirements appear
flexible and principle-based by design,
and it seems likely that insurers will be
able to report on risk and solvency in a
way that is meaningful to their specific
businesses.
Alistair Macpherson is a Director in PwC’s
actuarial practice in New York focusing on risk
and capital. Joseph Calandro, Paul Delbridge,
and Henry Jupe contributed to this article.
Competing for Talent? Ask Yourself These Questions
BY MARK SHLIEN
THe eConoMy has created a new set of rules. agencies must raise productivity by hiring the most skilled and talented
people they can find. although there have
been many layoffs in the past few years, tal-
ented people are in great demand. To attract
the best, organizations must rethink their
strategies to effectively recruit, motivate and
retain committed employees in this highly
competitive environment.
Knowing what makes your agency
unique and communicating that
effectively can help build a workforce that
is energized and committed to achieving
the organization’s goals.
Uniqueness will vary from agency to
agency, so to determine yours, consider:
What do employees think? Make a
list of selling points for job applicants.
solicit feedback from your employees.
Why do they like working there? What
makes them feel good about their job and
the agency? What do they like about their
manager? one way to identify positive
points is to conduct an employee-
satisfaction survey to learn employees’
perceptions of the agency, its values, work
environment and management, strengths
and weaknesses. from this feedback,
employers can develop policies and
retention programs to address turnover,
recruiting issues and employees’ concerns.
applicants, even those not hired. They
treat applicants like their customers,
provide them with feedback in a timely
manner, and are always recruiting
(selling), even during the job interview.
Company culture. Company culture
can be defined as the unique pattern of
expectations, beliefs, values and attitudes
about the company. While largely
invisible and rarely discussed formally, a
culture’s values affect employees’ ability
to raise issues, solve problems, act on
new opportunities, move in new and
creative directions and perform to their
potential. Culture is the driving force
of the organization because it largely
determines how motivated, cooperative
and productive people are able to be. NU
Mark Shlien is president of iPeople
LLC, a Washington, D.C.-based execu-tive-search and recruiting firm for insurance professionals, insurance agencies,
bank-owned agencies, brokers and
insurance carriers. He can be reached
at mark.shlien@theipeople.com.
