As a software sales professional, and an actuary, I have seen ERM in the spotlight for many years. Yet many companies still struggle to implement an ERM system that delivers value.
Which raises the question…what does a successful ERM system look like?
The answer, as they say, depends. In a company focused on one business area, such as life insurance, it may look like a commercial financial modeling system with some higher-level adjustments for risks that do not lend themselves to actuarial modeling. In a multi-line company, the ERM system may be a collection of “best of breed” commercial projection systems, aggregated at a corporate level, with additional risks modeled at the aggregate level.
While a single, broad ERM platform for any type of company is an attractive solution, the current financial modeling market has yet to produce such a system.
But with one or more commercial modeling solutions, a means to aggregate results and introduce additional risks, and a commitment to constantly improve the solution(s), an ERM system can add great value in understanding and managing the broad range of business risks that insurance companies face today.