Patricia Guinn, Towers Watson managing director said in an online interview that ERM is "the framework enabling insurers to identify sources of potential major losses."

She noted that factors in successfully imbedding ERM into a company's everyday operations include clear risk management organizational structures and processes and a strong risk culture and buy-in to the value of ERM throughout all levels of management.

Insurers have fared "better than one might think" in the financial downturn, she said.

"Insurers recognize that risk-taking must be well controlled. Most insurers have specified risk limits and, because of the financial crisis, have put additional focus on market, credit and operational risks," she said.

Those who fared best, she added, were typically companies that have taken the time to articulate and agree on their overall risk appetite or risk tolerance.

Insurers continue to make progress imbedding ERM programs within their organization, she said, noting that the survey found that ERM is influencing key business decisions of more insurers than ever.

"For example, a lot of work has been put into developing risk tolerance statements since the survey was last conducted in 2008," she said.

This year, Ms. Guinn noted that 59 percent of survey participants said they have documented their risk tolerance, up from 47 percent in 2008. She pointed out that companies with a formal risk appetite statement were more likely to be satisfied with the performance of their ERM capabilities during the financial crisis than those insurers that had not done this.

"Many insurers face challenges imbedding ERM in their day to day operation, but smaller insurers face the most difficulty," she added. "Companies with revenues of more than $10 billion are generally further on most aspects of ERM implementation and they see it as a competitive advantage, with better informed decision making on many business fronts that can lead to better performance."

She concluded, "Insurance executives believe there are substantial benefits to be had by imbedding a strong ERM program in their companies. These include better decision making, lower capital requirements and competitive advantage."