While the US insurance industry is making strides towards RMORSA readiness, a number of material gaps still exist at many companies. Furthermore, in PwC’s view, there are many important advantages to having a well embedded ERM framework that helps insurers exploit key opportunities and maximize risk-adjusted returns, while protecting policyholders’ interests. Meeting regulatory requirements as a by-product of an effective ERM framework and risk-aware culture, rather than seeing the RMORSA as a pure compliance requirement, will help differentiate tomorrow’s winners in the market.
PwC recently surveyed 65 US life, P&C and health insurers about their ERM practices and readiness for RMORSA requirements. While some insurers are ahead of the curve, survey results indicate that, for the industry as a whole, there is a potentially significant gap between perceptions of RMORSA preparedness and the actual completeness of underlying risk frameworks.