Risk Management Maturity Linked to Better Corporate Performance
Maturity of risk management processes is correlated with sustainable improvements in corporate performance, according to the 2012 Risk Management Benchmarking Survey if the Federal of European Risk Management Associations (FERMA), as reported in Continuity Central.
The 2012 survey shows that companies with the most advanced risk management show the strongest level of growth for the past five years, as measured in terms of earnings before interest, taxes, depreciation and amortization (EBITDA), the article says.
The survey also found that 28 percent of companies with advanced risk management practices report an EBITDA growth rate of more than 10 percent, compared to 22 percent whose risk management was classed as “mature,” 15 percent for “moderate,” and 16 percent for “emerging.”
Other survey results include:
- Top management wants more information on risks and risk management, according to 46 percent of respondents. In 53 percent of the companies with mature or advanced risk management (up from 45 percent in 2010, the function now reports to the board, a board committee or a top executive.
- When it comes to the insurance market, European businesses report wanting sustainable relationships with stable partners, Continuity Central writes. They are not looking to increase risk transfer (17 percent), but they want long-term arrangements (40 percent) and more robust insurance partners (32 percent).
- More than half (57 percent) report strengthening their loss prevention activities.
This is the sixth edition of the survey, and 809 responses from risk and insurance managers in 20 European countries were received.