- Pricing and telematics lead the charge as insurtech patents jump 40pc
- FCA puts general insurance pricing practices under review
- Volvo and Baidu reach agreement to produce autonomous vehicles
- Cyber and D&O exposures increasingly intertwined, Airmic report finds
- Arch selects Touchstone for cat risk modelling
Global horizon scan reveals risk management priorities
Written by staff reporter
Sword Active Risk has published the results of its annual survey of Risk Managers from 80 international organisations. The survey, which was completed during Sword Active Risk’s Global Risk Management Conference series (held in Chicago, London, Dubai and Sydney), shows a dramatic increase in political risk, emanating from the outcomes of the UK's Brexit vote and the US Presidential election.
“While both of these events were on the horizon last year, no one predicted that they would turn out quite as they have done, with the UK voting to leave the EU, and Donald Trump now US President Elect," said Sword Active Risk vice-president Keith Ricketts, "After the financial challenges of 2008 and the global recession, there was a feeling that many markets were getting back to a more even keel. This is a stark reminder that unexpected events beyond the control of companies can come out of the blue and have a dramatic impact.”
In the UK 44% of organisations cited the political situation, and subsequent implications as the biggest potential challenge or unknown to their business, in stark contrast to last year where supply chain and cyber security were the most significant risks being faced by companies. In the US, this year a third of companies saw the domestic political situation and supply chain as the biggest risk, where last year geopolitical, and physical/construction risks where seen as more important. In Australia, just under a third (29%) of those surveyed said that political unrest was the biggest threat.
The survey asked respondents about the use of enabling technology such as mobile, social collaboration and relationship visualisation solutions within the risk process. Across all regions relationship visualisation was seen as the most important element when looking to improve risk processes.
“The requirement of relationship visualisation tools within the risk management process is, we believe, indicative of organisations extending risk management out to the supply chain, as risk becomes more of a boardroom agenda item,” explained Ricketts.
The survey also confirmed the rising importance of risk, with well over half of those surveyed in every geographic region stating that risk management strategies were increasing in significance across the business. This sustains the trend seen in the two previous surveys run by Sword Active Risk.
“The reasons given for the increase in the importance of risk and opportunity management is a point of interest, as it varies across markets. In the UK it is largely customer driven and being supported from the top down. In the US, financial and regulatory compliance are the strongest driving factors, and in Australia/Asia, specific threats to the business and top down adoption are the reasons given,” Ricketts continued. “That risk management is continuing to raise its profile across the business landscape is no surprise to us. The differing reasons from diverse geographic regions shows the variance in risk maturity and reaction to local market conditions. This all points to the management of risk rising up the Boardroom agenda for executives and shareholders alike”