The global financial crisis has underlined the need for firms to take a holistic approach to risk management, according to a leading expert from Zurich Financial Services Australia.

Speaking at the Risk Management Institution of Australasia (RMIA) annual conference in Cairns last week, Zurich’ Head of Global Corporate Kai Dwyer said firms with an embedded culture of risk management have endured the downturn well.

“These organisations stand out as having a strategic competitive advantage arising out of their risk management culture,” he said. “They not only understand the importance of fundamental enterprise risk management principles better than most, but their decision-making is permeated by forming balanced views of risk versus reward.

“They don’t wait for the regulators to tell them what their boundaries are.”

In addition to risk assessment, Mr Dwyer says risk managers have the tough job of “convincing an organisation to limit its risk exposure in good times” when many others increase risk exposures.

Mr Dwyer says general insurers have fared better than other financial services sectors because the industry “systematically manages the risk of financial destruction in a more robust fashion”.