Speaking at the 2013 Actuaries Summit, Milliman principal Joshua Corrigan told delegates that ERM was moving towards a new framework, which he called ERM 3.0.
“Moving over the last year or two, and over the next five – maybe even longer, maybe 10 – I think we’re moving into a new [ERM] era of 3.0 which really, is the era of cultural resilience,” Mr Corrigan said.
“In this era, I think a lot of institutions internationally and some in Australia are really starting to think much more broadly … not just from a quantitative aggregation perspective, but really risk as it pertains to their organisation.
“The concept of reliance is now starting to become much more used, particularly in the European markets, and there is very much a focus on risk interrelationships and dynamics,” he added.
Mr Corrigan said that previous enterprise risk management frameworks worked to get “fundamental building blocks in place” but that the industry is now concerned with a more holistic view.
“It’s all about thinking much more holistically about how an organisation pertains to existing goals, so this concept of reliance is really starting to come into the fore,” he said.
“It is about how an organisation moves with the times, how it responds to a dynamically changing environment.”
The Actuaries Institute said that while longevity risk is one of the most prominent risks facing society, large sectors of corporate Australia still remained exposed to enterprise risk.
“Enterprise risk management is no longer seen as simply a compliance exercise, but rather a critical mechanism to deliver deep insight into the strategic drivers of risk in the business,” Actuaries Institute chief executive Melinda Howes said.
