More than four in five executives surveyed at North American insurance firms say they will benefit from an own risk and solvency assessment (OSRA), but a consulting firm suggests the carriers "have a long way to go" before completing their ORSAs.
Towers Watson of New York announced Thursday some results from its survey of 539 senior insurance executives in its seventh biennial global enterprise risk management (ERM) survey.
"Over two-thirds (68%) of North American respondents indicated their company will be required by regulators, or intend themselves, to perform an Own Risk and Solvency Assessment (ORSA)," Towers Waston stated. "When asked whether key aspects of the ORSA would generate significant or moderate benefits, over 81% said they would."
But Towers Watson added only 20% of respondents said they "have outlined a road map for their project plan" while 7% said they had educated the directors on their boards on their "new oversight responsibilities. Fewer than one in eight respondents, or 12%, reported they had produced an initial “dry run.”
There were 200 North American respondents to the survey in the United States, Bermuda and Canada, Towers Watson said, adding 42% were P&C insurers, 26% were life, 16% were reinsurance, 11% were multiline and 5% were “other.”
In Canada, the Office of the Superintendent of Financial Institutions announced last December it is proposing a guideline for ORSA for federally-regulated P&C insurance carriers and is seeking input from stakeholders until April 12 of this year. If approved, the new ORSA would take effect Jan. 1, 2014.
In the Towers Watson survey, executives were asked about areas where they could improve.
"North American insurers included risk monitoring and reporting (52%), risk appetite (38%), and risk limits and controls (37%) as their top improvement priorities, followed by economic capital calculation capability (36%)," the company stated. "According to the survey, insurers have made good progress with their risk appetite statements; however, they indicated that significant work remains to make certain their companies' risk appetite process is embedded in the business."