VIEW: On understanding and managing game-changing risks
Written by Socrates Coudounaris, chairman of the Institute of Risk Management
The impact of current macro trends and risks, such as cyber security, AI and Brexit will continue to put pressure on, and potentially change entire business sectors. Leaders who think critically about the future, anticipate disruption to their sectors, while building resilience and agility in their models will be in a better position to tackle a challenging risk environment and thrive in the future.
This year the IRM has been placing significant emphasis on supporting businesses and risk professionals in understanding and managing game-changing risks such as cyber. Our new Digital Risk Management Certificate (developed with support from Warwick University) is designed to help equip those on the front line of business ensure measures and checks are in place to keep the organisation safe.
The macro-environment may also restrict or provide opportunities for M&A in the insurance and financial services sectors in terms of activity, deal volumes and management of capital-intensive portfolios. Global political and environmental risks (weather, civil unrest, unstable governments) may increase further and have the potential to erode profits and predictability of operations.
In addition, insurers are increasingly facing new and emerging competition in the form of new market entrants and start-ups in fintech and insurtech. Insurers have historically been slow to invest in their digital propositions – and the infrastructure to support them. Today, consumers expect insurance and financial products to be increasingly simple, flexible, accessible and serviced seamlessly across digital and offline channels.
Indeed there are also huge opportunities to serve consumers, if established insurers can adapt their strategy and operating model (and attract innovative talent) in the face of new competition. Critical to achieving an agile and innovative digital insurtech or fintech business is striking the right balance in culture: being able to manage within risk tolerance, whilst not stifling innovative thinking and swift delivery.
Save the date: Thursday 14th November for our flagship 10th Anniversary Risk Leaders conference in London.