ERM maturity in an organisation is key in determining whether it will remain resilient in the face of changing business environment as a result of emerging risks and market trends.

KPMG approached a number of insurance companies with the aim of assessing the maturity levels of their Enterprise Risk Management programs. This entailed assessing how these insurers are balancing risks and opportunities against the KPMG Maturity Continuum Index that focuses on 5 key components of a risk management program, i.e. Risk Governance, Risk Assessment, Risk Monitoring and Reporting, Risk Quantification and Aggregation, Risk and Control Optimisation.

 

Summary of findings     

• 56% have an embedded ERM framework        
• Only 13% of interviewed organizations
  have an embedded comprehensive compliance culture, risk KPIs for Management and
  have conducted quality assurance review on their risk and internal Audit
  functions.
• 2 of 3 of the insurers with the basic
  plus ERM maturity have risk monitoring as the third best performing element of
  the risk management framework after risk governance and risk assessment.   
• 5 of 16 of the insurers interviewed
  have embedded a risk appetite framework in their decision making processes.    
• 13% utilize IFRS 9 information
  in the strategic and business decision making process.     
• Only 6% of assessed insurers
  have embedded operational excellence initiatives and remediation practices of
  limit breaches
  

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