Other parts of this series:
With the insurance industry undergoing a significant shift due to disruptive technologies, new competitors and complex threats, including economic protectionism, ransomware, and global geopolitical risk, some insurers are tempted to hold back and assess the impact of these changes before making major changes. Going into wait-and-see mode puts insurers at the risk of losing their competitive edge and becoming less relevant. The risk of doing nothing could be greater than the risk of taking action.
In Accenture’s 2017 Global Risk Management Study: Insurance Report, six key recommendations were highlighted for risk leaders:
1. Actively leverage internal knowledge
Work to give risk professionals the time and freedom to achieve more, by automating drudgery and strongly defending the right initiatives. The function should continuously challenge the company, and risk leaders should continuously challenge the risk practice itself.
2. Build a powerful risk radar
Create and develop a dedicated emerging-risk working group that can identify and evaluate the nature of emerging risks and their potential impacts.
3. Mix up the team
Introduce confident generalists, experienced divisional leaders, and specialists from other fields into the risk function to create a more blended interdisciplinary team. Greater diversity—particularly of gender, age, and nationality—can add valuable new perspectives and strengthen the team.
4. Report to the top
Whether risk is officially part of finance or any other department, risk leaders need a channel through which they can routinely engage directly with the CEO and other members of the C-suite as necessary. This allows risk to have suitable influence, builds trust and facilitates integration with the business.
5. Boost risk processes
Increase the rigor of operational risk management and create a more effective and impactful operational risk committee that includes IT, compliance, legal, audit and vendor members.
6. Get closer to the business
Position risk as a trusted partner and get the function involved in decision-making instead of just being informed afterward. Drive and campaign for better links between the company’s risk appetite and the risks managed by the function, and provide an overall risk perspective.
Despite the uncertainty, risk teams should be more proactive and set an example for their firms by taking deliberate action. Shying away from action, or waiting too long to innovate, could be the biggest risk of all.