Now that we’re familiar with the potential benefits of risk-finance integration, how can insurers enhance the CFO-CRO partnership?

Based on our interviews and survey research with global financial firms worldwide, we’ve identified six lessons learned:

  • Establish integrated and shared data sources. Insurers should collaborate to solve data quality issues as an effective way to reduce a common area of conflict and improve the risk-finance working relationship.
  • Collaborate in developing risk and capital models, which can enhance the risk-finance partnership at the operational level. Insurers that improve efficiency can eliminate redundancy in process and technology, as well as data.
  • Strike the right balance to promote good interdependence and cross-leverage between risk and finance. It is important for risk to maintain the ability to push back against finance if commercial and risk objectives come into conflict.
  • Increase the value-added by the risk function. Insurers should develop advanced risk analytics and modeling capabilities. They should also have perspective on risks emerging from the global environment, and provide enterprise-wide risk input into management of operational, emerging and strategic risks.
  • Rotate personnel between risk and finance. Even if risk and finance personnel find themselves in opposition on an issue, speaking a common language and having common experiences can help enhance operational effectiveness.
Rethinking Risk in Financial Institutions Making the CFO-CRO Partnership Work
View the PDF.

Amid economic volatility and regulatory change, the CFO-CRO partnership will continue to evolve. What is clear, however, is that risk-finance integration will enable insurers to respond more fluidly and confidently and could put them back on the path to profitability.

To learn more download Rethinking Risk in Financial Institutions: Making the CFO-CRO Partnership Work (PDF; opens in a new window).

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