SCHAUMBURG, Ill., March 15, 2011 /PRNewswire/ -- International terrorism, Chinese economic hard landing and the issue of failing states are becoming the top emerging risks in the minds of corporate risk managers, according to the 2010 "Emerging Risks Survey," the fourth in a series of surveys sponsored by the Society of Actuaries (SOA) and its industry partners. The risk manager survey of emerging risks found concern over geopolitical risks increased – up 10 percent from 2009's survey – due to the rising political tensions around the world.
While the economic category of risks was still a clear top choice among risks managers, as the timing of the survey distances itself from the financial crisis, its dominance as an emerging risk decreases – concern over economic risks decreased by seven percent since last year's survey.
"The world of geopolitical risk is rising, and that impacted the survey responses," said Max Rudolph, FSA, CERA, CFA, MAAA, owner of Rudolph Financial Consulting LLC and proprietor of the survey. "As actuaries, who make a living out of analyzing risk, we believe comprehensive and integrated risk management practices help prepare a company to succeed across a variety of potential scenarios with focus on both mitigation and optimization. That's why it is critical for businesses to consider implementing an enterprise risk management strategy to hedge against potential unforeseen business risks."
When compared to the 2009 survey results, risk managers expressed growing concern over the following geopolitical emerging risks in the survey:
- International terrorism increased from 30 percent in 2009 to 43 percent in 2010
- Chinese economic hard landing grew from 33 percent to 41 percent
- Failed and failing states risks doubled from 18 percent in 2009 to 38 percent in 2010
- Transnational crime and corruption increased from seven percent to 12 percent in 2010
- Retrenchment from globalization grew from 18 percent to 25 percent in 2010
According to Rudolph, "The trends described in the survey can aid risk managers as they contemplate individual risks, combinations of risks and unintended consequences of actions. The survey results also provide a tool for risk managers to network with peers and identify new ways to think about risk."
2010 proved to be a pivotal year for risk managers as most organizations increased both their risk management activities and staff. However, although survey results predict an uptick in enterprise risk management activity in 2011, fewer staffing increases are expected when compared to 2010.
Rudolph will be presenting the findings from the 2010 Emerging Risks Survey during the 2011 Enterprise Risk Management (ERM) Symposium, which will be held in Chicago March 14 – 16. The symposium will gather actuaries, corporate risk experts and consultants across the globe for a three-day convention to gain insights from some of the most prestigious executives in the world. For more information on the ERM Symposium and how to register, please visit: http://www.ermsymposium.org/2011/index.php.
The 2010 Emerging Risks survey was conducted by the SOA, Casualty Actuarial Society and the Canadian Institute of Actuaries. It garnered input from 141 risk managers, most of who have more than 10 years of experience in the role. This was the fourth iteration in a series of surveys, distributed since April 2008.
For a copy of the full survey results, please visit http://www.soa.org/files/pdf/research-2010-emerging-risk-survey.pdf.
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The Society of Actuaries is an educational, research and professional organization dedicated to serving the public, its members and its candidates. The SOA's mission is to advance actuarial knowledge and to enhance the ability of actuaries to provide expert advice and relevant solutions for financial, business and societal problems. The SOA's vision is for actuaries to be the leading professionals in the measurement and management of risk. To learn more, visit www.soa.org.
SOURCE Society of Actuaries (SOA)