Press Releases

Marsh-RIMS Survey Finds Risk Managers and Senior Leaders Differ on Role of Risk Management
| Share

Although risk managers are taking on more strategic roles in their organizations, a disconnect still exists in many organizations between how risk managers and senior leaders view the role of risk management, according to a new survey published by Marsh and RIMS.

An overwhelming majority of risk managers and C-suite executives responding to the ninth annual Excellence in Risk Management study agreed that expectations of the risk management function have increased in recent years. Yet the two groups differed in their views on whether the role should be primarily defensive or anticipatory.

C-suite respondents increasingly expect risk managers to be more involved in their organization’s overall business strategic planning efforts and to lead enterprise risk management activities. However, when asked about the C-suite’s increased expectations, most risk managers believed their priorities to be integrating more deeply with operations, providing better quantification and analysis on risk management, and executing daily activities more efficiently.

“The C-suite clearly is telling the risk manager to grab hold of strategic risk management,” said Brian Elowe, a managing director in Marsh’s Global Risk Management Division. “Risk managers who are not seizing this opportunity should assess the resources they need to help meet management expectations.”

The report also found that C-suite respondents and risk managers had differing views on the strategic value of total cost of risk (TCOR) measurements. Sixty-eight percent of risk managers said that they use TCOR measurements, but many C-suite respondents did not seem to be aware of this: 51 percent said that their companies do not measure TCOR. Even in firms where C-suite respondents understand that TCOR is being measured, they show little awareness of what goes into the calculation, an indication of the relatively low value they place on it.

”Measurements such as total cost of risk can bring certain value to risk management budgeting and benchmarking, but they do not necessarily give senior leaders the strategic view of risk they are seeking,” said Nowell Seaman, Manager of Risk Management and Insurance at the University of Saskatchewan and a member of the RIMS Board of Directors. “Organizations are better served when risk managers engage in strategy planning and strategy execution efforts by developing a formal strategic risk management framework, and consolidating the disparate emerging risk communication channels that already exist in organizations.”

Other significant findings from the survey include:

  • More than one-third of respondents said that the economic downturn led to an increase in the use of analytics in risk management. An almost equal number said the downturn increased their companies’ focus on risk volatility, an important measure of how divergent actual losses may be from expected losses.
  • The presence of broad-based risk committees at companies held steady at just over 60 percent in 2012, after showing a steep rise between 2010 and 2011. About 40 percent of respondents at companies without a cross-functional risk committee say their organizations should create such committees.
  • Among respondents whose organizations were affected by a natural catastrophe in 2011, 75 percent said their company will re-examine its approach to a number of risk management areas. More than two-thirds of those respondents say that they have already done so.

The survey was compiled from online responses received during the first quarter of 2012 from 1,322 risk managers, C-suite executives, and others involved in risk-related functions. Although primarily from North America, respondents represented companies with headquarters in nearly 50 countries.

Findings from the survey of more than 1,300 risk managers, C-suite executives, and others were published jointly by Marsh and RIMS and released today at the RIMS 2012 Annual Conference & Exhibition in Philadelphia.

Excellence in Risk Management IX: Bridging the Gap is also available on

About RIMS

As the world’s preeminent organization dedicated to advancing the practice of risk management, the Risk and Insurance Management Society, Inc. (RIMS) is a not-for-profit organization representing more than 3,500 industrial, service, nonprofit, charitable and government entities globally. Founded in 1950, RIMS brings networking, professional development and education opportunities to its membership of more than 10,000 risk management professionals. For more information on RIMS, visit


Product and Industry Solutions

Media Contacts
Sally Roberts
303 952 9453

Lee Ann Farwell
212 345 1125

About Marsh
Marsh is a global leader in insurance broking and risk management. Marsh helps clients succeed by defining, designing, and delivering innovative industry-specific solutions that help them effectively manage risk. Marsh’s approximately 27,000 colleagues work together to serve clients in more than 130 countries. Marsh is a wholly owned subsidiary of Marsh & McLennan Companies (NYSE: MMC), a global professional services firm offering clients advice and solutions in the areas of risk, strategy, and people. With 57,000 colleagues worldwide and annual revenue exceeding $13 billion, Marsh & McLennan Companies is also the parent company of Guy Carpenter, a global leader in providing risk and reinsurance intermediary services; Mercer, a global leader in talent, health, retirement, and investment consulting; and Oliver Wyman, a global leader in management consulting. Follow Marsh on Twitter @MarshGlobal, or on LinkedIn, Facebook, and YouTube.