Enterprise Risk Management (ERM) is often misunderstood as a regulatory checkbox or thought to be complicated and expensive to establish. Instead, it should be seen as a practical business discipline that empowers companies to identify, evaluate and prioritize their specific organizational risk. ERM also enables companies to make strategic operational decisions, including those related to insurance coverage, risk retention and investment planning.

Amid an increasingly unpredictable business landscape, being prepared for inevitable disruptions is no longer optional — it is essential. A robust ERM program that proactively identifies, assesses and manages threats has become a core operational imperative.

However, many businesses still have significant gaps in their ERM programs. Here's where things stand:

  • 73% of businesses report that they are underinsured against catastrophic risks, according to HUB’s 2025 North American Outlook Report.

  • 62% of companies have a formal ERM process in place, HUB’s survey found, but only a fraction assesses critical risk categories:
    • Just 22% of U.S. companies include political risk.
    • Only 21% of Canadian firms incorporate business interruption.

  • 29% of organizational leaders without an ERM program believe their risks are already being monitored through other means.1

  • 16% of organizations that haven’t implemented ERM say they have more pressing priorities to devote time and resources to.2

The reality is organizations can’t afford not to embrace ERM. Working with an experienced insurance adviser, an organization’s ERM framework can be developed utilizing its own data and internal systems. This enables organizations to break down silos and create a unified understanding of threats across departments, from HR and IT to operations and finance. With that full-spectrum view, leadership teams are better equipped to act quickly and decisively when disruptions occur.

And as ERM programs mature, they don’t just help mitigate the downside, they can uncover opportunities as well, whether it’s identifying an untapped market during a supply chain shakeup or recognizing a competitive advantage in operational agility.

Let's look at ERM in action with a regional bank in the Southeast U.S that employed ERM to build both resilience and agility. Through a strong business continuity management program (BCMP), the bank was prepared when a major hurricane disrupted power and communications statewide. It became the first financial institution in the region to reopen, due to the clear protocols in its BCMP. The bank also delivered immediate financial support to affected employees, boosting morale and loyalty. While competitors scrambled to recover, its proactive ERM strategy preserved customer trust and positioned the bank as a leader when it mattered most.

The value of ERM also enhances an organization’s insurability. Demonstrating a proactive approach to identifying and mitigating risk positions organizations more favorably with underwriters, often leading to broader coverage, more competitive terms and a lower total cost of risk. It can also open the door to alternative risk financing options, such as captives, for organizations looking to self-insure.

The HUB EDGE

While no one can predict the next crisis, businesses can prepare for it. Building a resilient risk management framework requires an approach rooted in practicality and flexibility designed to meet you where you are and move at the pace your business needs.

Here’s what you need to know to develop an effective ERM strategy:

  1. Start at the top. For an organization’s ERM strategy to be successful, executive leadership and boards must fully endorse it. Cultural buy-in enables organizations to move beyond fragmented, incident-based reactions and instead adopt an agile, organization-wide risk framework.

  2. Define your ERM objectives and identify key stakeholders. That means involving leaders from every business function to ensure diverse perspectives are represented and incorporated.

  3. Leverage the tools and resources you already have. Many companies are sitting on valuable data and existing risk protocols, they just need help organizing, analyzing and deploying that information. A streamlined methodology, such as HUB’s ERM and Supply Chain AI Risk Solutions, helps balance strategy with execution.

  4. Plan for downstream consequences, not just a specific event. How will your people respond to a disruption? What happens to your supply chain? Which critical systems need to stay online? By running through those scenarios in advance, companies can build the muscle memory needed to respond quickly and effectively when the unexpected occurs.

  5. Conduct ongoing enterprise-level assessments. Working with your broker to evaluate all business risks throughout the year ensures potential exposures are identified before they become a problem.

  6. Partner with specialists who understand dynamic and evolving risks. HUB’s internal specialists span all major industries and geographies, with deep knowledge of specific threats and tailor-designed solutions for each client’s unique risk profile. From ERM planning and alternative risk transfer to continuity mapping and coverage optimization, HUB helps transform risk from a liability into a strategic advantage.

By embedding ERM into daily operations and supporting it with proactive risk strategies and continuity planning, organizations can move from reactive to resilient. This ensures they are equipped to not just withstand disruption but thrive through it so they can face the future with flexibility and confidence.

1 North Carolina State University, “The State of Risk Oversight,” June 2022.
2 North Carolina State University, “The State of Risk Oversight,” June 2022.