Enterprise risk management (ERM) has been the subject of a number of articles and white papers following the recent turmoil in the subprime housing market. Some observers have pointed out that financial institutions were the first to adopt ERM and, to many, it appeared ERM got a failing grade. Originally, the buzz for ERM surrounded the banking industry. This was followed shortly by success in the insurance industry. A new report issued by the Aberdeen Group in May 2008 shows the promise of ERM within manufacturing operations. Some manufacturers are now beginning to understand the value of ERM and, as a result, are beginning to gain the competitive advantage that goes to the early adopters. Even more impressive than the Aberdeen Group study is a study commissioned by the Association of Insurance and Risk Managers. This study found that ERM can be shown to significantly reduce the net risk exposures to an organization and thus support improved decision-making.
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