Most insurance company bosses believe a focus on enterprise risk management (ERM) can enhance their businesses — but they are struggling to effectively implement it company-wide.

That was one of the findings of a global survey of the insurance industry, entitled "Does ERM Matter?" by accountancy firm PricewaterhouseCoopers (PWC).

According to company leaders, it apparently does matter, as more than 90 percent of respondents have ERM programmes in place and see it as an opportunity to improve decision-making and boost shareholder value.

Bermuda respondents scored better than those elsewhere in the world on the question of how highly they rated their risk and data systems — perhaps indicating that the island's insurance sector is technologically advanced, with some of the world's most sophisticated risk modelling systems.

The survey of 53 insurers, carried out in the second half of 2007 and the first quarter of this year, showed that ERM has become a boardroom priority and 40 percent of respondents have a board-level ERM committee. The role of chief risk officer is gaining in importance, with 60 percent of respondents saying their CRO communicates directly with the board on some management issues.

While the will at the top is clearly there, the task of fitting ERM into company culture is proving difficult. "Fewer than half of survey participants are confident that ERM has been embedded into their strategic planning, resource allocation and performance management functions," said PWC in a statement.

The credit crisis has highlighted systematic risk management failure among financial services companies, including some who thought they had strong ERM systems in place.

PWC partner Colm Holman said: "Senior management expectations of ERM have soared as they increasingly look for ERM to help them strike the right balance between risk and reward amid increasing competition, a softening of rates in the non-life sector and the credit turmoil which has highlighted the systematic risk management failures in many financial services businesses.

"At the same time, the evolving risk environment and more exacting analyst, investor, regulator and rating agency expectations are raising the bar for ERM, increasing the pressure on insurers to put risk at the heart of their strategy and operations.

"The findings of our latest survey indicate that while many insurers have made marked progress in developing effective ERM capabilities, unless they make ERM relevant and integral across their businesses as a whole, it will not meet expectations and achieve anticipated objectives."

The survey found that many respondents were finding it difficult to manage emerging risks and fewer were using their ERM capabilities to identify and capitalise on new opportunities.

Mr. Holman said the identification and recruitment of good risk managers was crucial for effective implementation of ERM, which needed to have a clear, firm-wide mission.

"It is likely 2008 will provide an immediate challenge to the efficacy and organisational relevance of ERM as insurers face market and economic stress. However, within this challenging environment, effective ERM could help companies gain a competitive advantage by sustaining investor confidence, identifying commercial opportunities and allocating scarce capital where it can earn its best risk-adjusted return."