Mercer Oliver Wyman wants to bring the quantitative risk management techniques used in the financial services industry to nonfinancial corporations. For that purpose, the New York-based subsidiary of Marsh & McLennan Cos., which provides consulting to financial services firms, has teamed up with consultants from another Marsh subsidiary, Marsh Business Risk Consulting, to form a unit to work with nonfinancials, the Corporate Risk Consulting Group.

John Drzik, Mercer Oliver's president, says the new group was formed in response to demand from nonfinancial companies, which can benefit from the quantitative approach used by financial services companies. Drzik acknowledges, though, that the risks of nonfinancial companies can't always be as easily summed up in numbers. "The approach has to be a hybrid in which you blend quantitative techniques where they work and others where they don't," Drzik says. "But a lot of the thinking that was done in financial services readily applies in the nonfinancial world." He cites the concept of quantifying a company's risk appetite: "In a nonfinancial, the discussion might be more subjective but it's still pretty important for an executive management team to get its board of directors and shareholders to understand where it's positioning itself on a spectrum of being a high-risk enterprise or a low-risk enterprise."

Drzik says that while many companies right now are dealing with risk as part of compliance, it's beneficial to relate it to financial and strategic planning. "Our practice was derived out of work we were doing on strategic planning," he says. "To form strategy, you should look at your risk, quantify it and then plan on a risk-adjusted basis."

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