Cutting costs and managing expenses top corporate risk managers' priority list as the weak economy lingers, according to a Towers Watson & Co. survey.

Nearly 64% of the 244 corporate risk managers surveyed said the cost of claims within their retentions, including captives, was the most important issue in controlling their total cost of risk.

Further, about 49% of risk managers surveyed said premiums paid to a third-party insurer is No. 2 in importance in efforts to keep costs down.

The cost issues prevailed over other aspects of risk management, including establishing a true enterprise risk management process within the company, according to the survey that the New York-based risk management and human resources consultant released last week.

Towers Watson surveyed corporate risk managers in April and May. Sixty-nine percent of participating companies had revenues of at least $1 billion.

Barry Franklin, Chicago-based director of Towers Watson's corporate risk management practice, said despite citing claim trends as an area of concern, few risk managers seek outside help from brokers or actuaries about how to manage claims.

He said risk managers might not be confident that a broker can help them keep the costs of retained losses down or that they are able to analyze trends affecting a company's claims.

Claims aside, risk managers also put ERM high on their list of priorities, with 55% of risk and finance managers reporting they have a true ERM process in place, up significantly from 11% in 2000 and 37% in 2005, according to the survey.

Of those companies that don't have an ERM strategy in place, 37% of the respondents said there has been no articulation of the value of implementing an ERM program and 27% said ERM was too resource-intensive and expensive.

“I expect the upward trend (in adoption of ERM plans) to continue as the Securities and Exchange Commission announced a proxy disclosure recently that will require company board members to be involved in risk management oversight,” Mr. Franklin said, adding that ERM generally is viewed as a best practice within the insurance and financial services industry.

Still, it's possible some companies have struggled to put an ERM program in place due to budget constraints as well as reduced staff within risk management departments, Mr. Franklin said. He also said some companies may be taking the wait-and-see approach in regard to ERM, citing no clear definition or expectations of what the strategy should accomplish as reasons for the delay.

“I think ERM is more defined now than it was in the past and there is more agreement among advisers on what the elements of ERM are as Standard & Poor's Corp. and the SEC have identified those core elements,” Mr. Franklin said. “I think they're addressing what ERM should entail, which should help that remaining 37% feel more comfortable with it.”

Mr. Franklin said there still is plenty of improvement to be made with ERM, including companies that already have a strategy in place. He said many companies think ERM is just identifying and categorizing risks, but they often fail to apply metrics and communicate the company's risk portfolio to its board of directors.

Among other survey results, 39% of respondents said they approve of contingent commissions as long as their broker discloses all compensation in a timely fashion. Eleven percent indicated they have no problem with the fees as long as laws are being followed and records are kept for regulatory review. Only 29% said contingent commissions should not be allowed.

The survey is available online at www.towerswatson.com.