The survey found that while nearly 80 percent of respondents have a scenario- and model-building capability (compared with only about half when surveyed in 2004), only one-third are fully confident they have clearly defined roles, responsibilities and accountabilities for ERM (compared to 31 percent in 2004).

PwC's report--"Does ERM Matter? Enterprise Risk Management In The Insurance Industry"--is based on a survey of 53 insurers representing a balance of life, non-life and multiline carriers, along with a selection of reinsurers from Europe, North America, Asia-Pacific and Bermuda.

Mr. Horgan said that while insurers have progressed since the survey was first taken in 2004, ERM still has a long way to go. To make ERM work for an insurer in the long term, he advised, "you've got to start with some top-down areas where you can make quick progress, like establishing an overall risk appetite."

Mr. Horgan also warned that driving the initiative down to a functional level takes time, "and you need to do it in a way that the business understands and sees value to it, and the business sees that you're trying to leverage the risk-taking activities and abilities they already have."

He added, however, that the progress companies have made is reasonable, "given the fact that they really as an industry started [implementing ERM] in earnest across the board only two or three years ago. The rating agencies have been a significant influence, with their increased focus."

The report also found that ERM is a strong board priority, and that chief risk officers have an increasing influence on its implementation--66 percent strongly agreed, 23 percent slightly agreed, and about 40 percent of respondents said their firm has a board-level ERM committee.

The role of the chief risk officer is also gaining in stature, with about 60 percent saying their CRO communicates directly with the board on at least some risk management issues.

Respondents believe ERM is more embedded into their strategic planning than in the previous study (42 percent, compared to 4 percent in 2004). However, PwC said there appears to be insufficient alignment between the overall risk appetite and the setting, monitoring and enforcement of risk limits.

According to the survey, fewer than 40 percent of respondents believe their firm's risk data and systems are "good" or "excellent"--only a marginal improvement from 2004, noted PwC. Communication and escalation of risk information were also highlighted as areas of weakness.

"It is likely 2008 will provide an immediate challenge to the efficacy and organizational relevance of ERM as insurers face market and economic stress," Mr. Horgan noted in a statement. "However, within this challenging environment, effective ERM could help companies to sustain investor confidence, identify commercial opportunities and allocate scarce capital where it can earn its best risk-adjusted return."

A copy of the full report, executive summary and key findings are available for download at http://www.pwc.com/insurance.