Senior risk professionals in the insurance industry need to strike a careful balance between the traditional and less established aspects of their roles. That’s one of the key findings of our 2015 Risk Management Study, the fourth edition of a study we first published in 2009.
We interviewed 150 insurance industry risk executives from around the world to gain insight into their challenges and opportunities. We found that they’re juggling the need to strengthen control frameworks for regulatory and reporting demands with the new imperatives of understanding emerging risks, assessing the impact of digital disruption, and helping the business to achieve its growth objectives.
Over the next few posts in this series, I’ll look at the changing risk landscape and how insurance chief risk officers (CROs) are repositioning the risk function within their businesses. Our research shows that they are shifting from a narrow, compliance-driven and “back-office” approach to one that serves more as an enabler for innovation and growth.
They are establishing the risk function as a strategic partner to be involved at every stage of the decision-making process. Some 85 percent of insurance respondents believe that risk management has helped their business to generate long-term profitable growth to at least some extent.
There is, however, plenty more work to be done. For example, 71 percent warn that a lack of integration with other business functions is impeding the overall effectiveness of risk management in their organization. One of the biggest challenges of all, according to 76 percent of insurance respondents, is gaining the trust of business units to advise on their operations.
Developing these relationships and required capabilities will take time. Yet it is now increasingly urgent for the risk function to become more engaged in the business evolution and reinvention in order to help steer clear of competitive threats.
In the next post in this series, I’ll take a closer look at the emerging risk management landscape in the insurance industry.