Other parts of this series:
“Progress always involves risks. You can’t steal second base and keep your foot on first.”—Frederick Wilcox, professional sportsman
Waiting to assess disruption and the impacts of change could be a bigger risk for insurers than exploring new opportunities. As the market grows for specialty services, insurers should be proactively driving innovation. As Accenture’s 2017 Global Risk Management Study shows, today’s risks are also opportunities.
Cyber is a prime example of how today’s threats and opportunities can overlap
As cyber attacks grow more sophisticated, insurers have many concerns related to customer trust and privacy, compliance with evolving privacy regulations and emerging vulnerabilities from expanded ecosystems and digital technologies.
At the same time, cyber is an opportunity. The cyber insurance market is expected to grow to $14 billion by 2022. Insurers will need to weigh that opportunity against the risk of a potential global cyber catastrophe, which could cost the industry $30 billion.
Cloud is ubiquitous, but potential not being tapped
The Global Risk Management Study found that 91 percent of insurers are using cloud, but just 26 percent are highly proficient in using it within their organization. Cloud underpins all digitalization—the technological innovation insurers need to meet future customer needs and business objectives. The biggest areas of opportunity are greater efficiency or productivity and improved regulatory data management. Cloud’s also crucial for cost control.
Data analytics: significant need, implementation challenges
The increased velocity, variety and volume of data have become the top challenge impeding risk management functions’ effectiveness. While the process of capturing and reporting enterprise-wide data is often still manually intensive and not supported by a common database that can collect all risk types, insurers agree on the rewards risk analytics brings to strategic planning and decision-making.
Risk teams exploring automation and intelligent machines, but have yet to exploit these technologies
Artificial intelligence (AI), robotic process automation (RPA), and machine learning build on and intersect with the advances risk functions have made through cloud and analytics. Insurers have begun experimenting with these technologies but aren’t extracting their full potential yet. The list of applications for RPA and AI is expanding rapidly to include reviewing disclosures, scanning transactions, assessing incident reports, picking up anomalies in employee activity, predicting changes to risk exposures, and rapidly checking data quality.
There are more possibilities to explore these opportunities than the time and resources with which to do so. One thing is certain, though: waiting too long to explore could hamper progress.