The changing face of risk management (Part 2 of 2)Posted on 21.02.2012 by Michael Costonis
Last week, I discussed Accenture research on the changing face of risk management. This week, I’ll highlight some of the findings in more detail.
The changing role of the Chief Risk Officer (CRO)
As the role of the CRO increases, so does the importance of collaboration and alignment with the Chief Financial Officer (CFO).
The importance of culture
Risk management must be embedded into corporate culture; furthermore, reward and compensation structures need to be aligned with the organization’s risk and compliance rules.
Business will only get more complex, not less. Insurers must prepare to meet these challenges with access to better information and insight.
Risk management is no longer concentrated in the usual city centers. In fact, Accenture research shows that 90 percent of Latin America businesses have an enterprise risk management strategy—compared with 54 percent of European and 60 percent of North American businesses.
Technology as an enabler of risk management
A rush of new tools and technologies are at insurers’ disposal; the challenge lies in integrating these tools in a way that aligns with the business and creates a competitive advantage.
Given the increasing complexity faced by insurers, many will choose to partner with companies, rather than develop capabilities in-house.
Regulation as a strategic business input
Insurers should consider regulatory shifts as an opportunity to focus profits and drive growth, rather than a tactical measure that needs to be completed.
Harmonization of risk technology
There is a growing trend toward harmonizing platforms and software systems, not only in the front lines but also for reporting and business intelligence.
To learn more, download The Changing Face of Risk Management.