OW Capability: Risk Management

Marsh & McLennan Insights

Marsh & McLennan Insights is a research institute dedicated to analyzing increasingly complex risks that are reshaping industries, governments, and societies. Drawing upon the expertise of Marsh, Mercer, Guy Carpenter, and Oliver Wyman, its mission is to assist decision makers to address these risks through research and insights that combine Marsh and McLennan’s rigorous analytical approach to risk management with leading thinking from research partners.

Marsh & McLennan Insights' current research program addresses four broad themes designed to help facilitate a productive dialogue about risks by policy makers, boards of directors, CEOs, and other senior executives. Click on each theme to learn more.

Research Relationships
Marsh & McLennan Insights leads and collaborates on research with top professional associations, non-governmental organizations, and academic institutions around the world, focusing on issues involving risks that affect multiple industries and nations. Our recent work includes collaborations with organizations such as:

  • The Association for Financial Professionals
  • The International Risk Governance Council
  • The National Association of Corporate Directors
  • The Organisation for Economic Cooperation and Development
  • The Wharton Risk Management and Decision Processes Center
  • The World Economic Forum
  • The World Energy Council

Decision Making

Improving organizations’ risk-based decision-making capabilities.

Faced with a progressively more complex and volatile business environment, organizational leaders must develop the analytical capacity and tools to understand the potential impact of a byzantine portfolio of risks on their organizational performance.

Incorporating emerging risks into decision making is much more than just a compliance exercise—it has become a critical driver of a company’s results. Companies that successfully integrate risk data into their decisions have a significant competitive advantage over those that fail to do so in a business environment increasingly defined by global recession, major government policy shifts, volatile commodity prices, and unstable financial markets.

Emerging Risks

Assessing and responding to risks triggered by unexpected events and to familiar risks in unfamiliar situations.

The frequency and severity of emerging risks such as extreme weather events, geopolitical conflicts, and financial crises is increasing. Emerging risks are risks triggered by unexpected events, such as the volcanic eruption in Iceland, and familiar risks in unfamiliar conditions, such as the souring mortgages that triggered the financial crisis.

Most companies remain vulnerable to these risks, which introduce volatility into companies’ earnings. Across industries and geographies, emerging risks are jeopardizing companies’ supply chains, impacting raw material prices, and threatening the security of critical industrial information. In effect, they are transforming the very nature of many companies’ business models, while receiving little to no attention in the boardroom or the executive suite.

Companies need to prepare for a new reality in which emerging risks increasingly impact their earnings and long-term strategy. Organizations urgently need to improve their ability to detect, assess, and respond to these risks, which can quickly develop into full-blown crises. Those that develop the ability to manage emerging risks will gain a significant competitive advantage over rivals that lack this level of sophistication.

Multinational Risk Governance

Strengthening national and international risk management efforts.

Improving national and international risk governance is crucial to effectively mitigating the world’s complicated and interlinked risks. The lack of global governance has been highlighted as a key global risk by the World Economic Forum's annual Global Risks Report.

The frequency of “fat tail,” or one-in-10,000-years extreme events, seems to be increasing. Moreover, increased globalization and the recognition of the impact of “creeping risks” such as climate change is creating more awareness of the need for risk governance.

However, many national and international institutions struggle to identify effective mechanisms and frameworks for this purpose. They are looking for examples to help them take an "all hazards" view of potential sources of risk—including natural disasters, major accidents, terrorism, and events such as pandemics.

Resource Security

Interconnected risks involving water, food, and energy are quickly escalating to chronic impediments to economic growth and social status

Global demand for natural resources and other commodities is approaching an unprecedented level as the world’s population grows from 6 billion people today to an estimated 9 billion people in 2050. Rising income levels in emerging economies are also putting new strains on resources, contributing to rising commodity price volatility.

This higher degree of volatility is resulting in new financial and social concerns that are difficult for corporations, governments, and consumers to manage.

Many areas of the world are facing water shortages, and these shortages are being aggravated by population growth, increased agricultural use, climate change, and competing needs for water.

Recent Insights