In an era of unprecedented change, it’s no surprise that many insurers envision a transformation of their risk capabilities in the coming years. In fact, nearly one-third of insurance respondents we surveyed are seeking to move from a moderate level of capability to a high level by 2015—a sharp contrast to the more moderate ambitions of the banking sector.
Three key priorities
Of the risk capability development goals we surveyed in our 2013 Global Risk Management Study, insurers’ top three are:
- Risk talent. This area is an obvious challenge in insurance, where risk functions are growing rapidly. To address these challenges, insurance respondents are deploying new training and retention programs, embedding the risk function within the rest of their business and focusing on rotation programs.
- Risk technology and data management. It is perhaps no surprise that risk technology and data ranks so high on the list of insurers’ priorities, given the focus of regulators on this area.
- Performance management and reporting. Risk technology can play a pivotal role here. Risk analytics can be used to track the impact of contract clauses and incentives on client behavior or to mitigate fraud risks, enhancing the value that the risk function brings to the broader business.
Join me next week when I explore what insurers can do differently to meet their risk capability goals.
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