Other key findings from the study:

External pressures are raising the bar for risk management globally. While 78 percent of companies cite "good business practice" as the principal driver for their current risk management efforts, rating agency considerations are a significant factor for 72 percent of North Americans respondents.

Changes in insurance solvency regulations were found to be a major driver for European Union insurers' interest in risk management.

Two-thirds of the insurance industry globally uses economic capital as a risk quantification tool. This is a significant increase over 2004 where only half of the respondents indicated they were using EC.

A further 19 percent of the participants indicated they are considering the use of EC.

The study found that insurers are using a diverse set of risk metrics--assessing the impact of risk on their capital, value and earnings in a variety of ways, with 63 percent using at least three differing measures. The most common are statutory or regulatory capital and surplus (56 percent), economic value (42 percent) and Generally Accepted Accounting Principles or International Accounting Standards (IAS) at (38 percent).

Managing Director Tricia Guinn, who oversees both the Tillinghast and reinsurance businesses of Towers Perrin, said in a statement that companies are "more disciplined in their use of enterprise risk management today than ever before, as catastrophic events, capital efficiencies and competitive pressures have driven companies to adopt less of a 'seat-of-the-pants' approach to risk issues."

"As risk issues have gained importance, so has the role of the chief risk officer," said Prakash Shimpi, Tower practice leader with global responsibility for enterprise risk management. "Insurers are not only examining risk more closely, but they are also holding executives more accountable for the results."

Almost half of the respondents (43 percent) report having a chief risk officer with primary responsibility for risk management, up from 39 percent in 2004 and only 19 percent in 2002.

The study also indicated that risk management is gaining importance in board rooms, with nearly all respondents (92 percent) reporting on risk to their board of directors at least annually, up from 84 percent in the 2004 survey.

Fifty-three percent of all respondents reported at least quarterly to their board. Risk reports to senior management have become a common practice, with 39 percent reporting monthly and another 35 percent reporting quarterly.

Bermudian (89%) and Canadian (82%) insurers are more likely than U.S. carriers or Asia/Pacific companies (53% respectively) to report quarterly on risk to their boards.

European life insurers (65 percent) and property-casualty insurers (60 percent) are twice as likely to report to senior management monthly as their North American counterparts (31 percent respectively), the study found.

While enterprise risk management has made significant progress in recent years, there are still growing pains.

Most respondents (77 percent) are highly focused on improving risk measurement and quantification processes to enhance their overall ERM efforts, particularly in the U.K. (97 percent) and Japan (95 percent).

Respondents are generally not satisfied with their current capabilities in many of the risk management areas they see as important. They are significantly dissatisfied with their ability to quantify operational risks and their ability to reflect risk in performance measures, according to the study.