Most actuaries think Australian companies perform well in the area of enterprise risk management (ERM), but only half take it really seriously, a survey has revealed.

The Institute of Actuaries of Australia (IAA) surveyed 250 actuaries and other professionals in some of the biggest financial and commercial businesses in the country to try and gauge how ERM is practised in Australia compared with other countries.

IAA CEO Melinda Howes admits the concept is still in its infancy in Australia. “We are only just starting to get our heads around this issue,” she told insuranceNEWS.com.au.

Ms Howes says ERM covers a huge range of risks for businesses, from potential financial and economic problems through to social and environmental issues.

The survey found 81% of actuaries think Australian companies are performing above average or in “the middle of the pack” with regard to ERM and only 11% believe they are lagging behind.

The top three benefits of implementing ERM were found to be minimising losses (64%); improving financial performance (64%); and managing expectations of customers, staff and investors (54%).

Bottom of the list were programs focusing on social factors (26%) and environmental factors (28%).

Most ERM programs focused on operational risk factors (91%) which covered the day-to-day running of the company, with 77% taking into account broader economic risks and 71% keeping track of strategic risks.

Ms Howes says just over half of the respondents believe their companies have an “embedded, formalised risk culture communicated to staff”.

“Only 20% felt there was a really strong commitment from their leaders,” she said. “If you are going to build a risk culture, it has to be built from the top. You can’t expect some compliance person in middle management to drive it.”