Airmic: Rewire your organisations, risk managers told

Risk managers, senior management and the insurance market must seek to "rewire their organisations" to ensure they have the necessary skills, structures and agility to keep pace with the fast-changing business environment; one in which complex liabilites and uncertainty are increasing. This greater collaboration is vital if companies are to address the interconnected nature of today’s risks.

This is the message from Airmic, which has today released a study on the future of risk management, entitled Risk Management: Vision 2020. Published during the association's annual conference in Harrogate, the research is based on the responses of 157 members surveyed between February and March 2019, and produced in collaboration with Control Risks, Willis Towers Watson, AIG, QBE and KPMG.

Report highlights: Vision 2020 (Source: Airmic)

THREAT MONITORING addressing risk, realigning opportunity and taking reward, produced by Airmic in collaboration with Control Risks. The external threats facing organisations over the next three years are becoming more complex, increasingly intangible, and harder to manage. However, there is a gap in how these risks are being addressed: only a third of respondents believe threat monitoring is integrated and valued in their organisation. This report argues that a good threat intelligence programme will not only help manage these risks but generate new opportunities by identifying areas for strategic innovation.

Mark Whyte, senior partner at Control Risks, commented: “Our aim was to gain a better understanding of how organisations view and monitor the world today. Most businesses are waking up to the fact that threat monitoring is vital in the current environment, and it’s encouraging to see businesses investing in relevant technologies. This is an area of strategic opportunity for risk and security professionals.”

GEOPOLITICS understanding the external threats to an organisation, produced by Airmic in collaboration with Willis Towers Watson. Boards report that geopolitics is their number one concern and, more than any other megatrend, Airmic members believe geopolitical tensions will become harder to manage over the next three years. Tackling this risk, however, is proving daunting: less than half of respondents expressed confidence in their own understanding. This report will help risk managers begin to break down the risks, understand their interconnectivity, and put into action the most effective response.

Alastair Swift, head of corporate risk and broking, GB, Willis Towers Watson, commented: “With geopolitical uncertainty dominating news headlines, now is the time for risk managers to take the lead. Our research makes clear that they will need to work across, as well as up and down, their organisation. A multidisciplinary, integrated approach, is a critical success factor.”

GOVERNANCE the value of boardroom engagement, produced by Airmic in collaboration with AIG. The risks to, and scrutiny of, directors and officers are intensifying, making strong governance more important than ever. Not only is the regulatory environment tightening, so are the expectations of consumers and society. Strong governance is therefore vital, as is a thorough understanding of your D&O exposure. Despite this, only 14% of Airmic members are confident that their directors have read and understood their D&O policy. This report lays bare some of the common myths about D&O policies.

Geraud Verhille, head of financial lines, AIG UK commented: “The risks facing directors and officers have evolved and these changing priorities should be reflected in the risk management approach and insurance procured. Some areas reshaping the risk landscape are heightened regulatory scrutiny, GDPR, social media and the #MeToo movement.”

TURNING DATA INTO INFORMATION improving accuracy in risk assessment, produced by Airmic in collaboration with QBE. The risk and insurance industry is embracing new data and analytical tools, but the approach is largely sporadic, rarely joined-up and few standards are being developed. Transforming data into information that informs good risk management and interacts with innovative and more accurate insurance products is the challenge. Risk managers are doing more than ever before to collect and analyse data, but there is a clear skills gap that must be addressed.

Cécile Fresneau, UK executive director at QBE, commented: “We are on the cusp of real change; data will be key to this transformation but so too will the experts with the skills to harness it. This report makes clear that collaborative relationships and gaining the right skills will be key.”

EMERGING RISKS transforming insurance for tomorrow’s risks, produced by Airmic in collaboration with KPMG. Closer collaboration and deeper ties between insurer and insured are urgently needed to transform insurance for tomorrow’s risks. This report paints a stark picture about the challenges faced by insurers and policyholders in a world dominated by intangible assets. Both risk professionals and insurers must focus on protecting such assets or risk a decline in relevance, it warns. Insurers will need to provide more bespoke services, it notes, while businesses must do more to understand and share information about their own risk profile.

Paul Merrey, partner, KPMG UK, commented: “This is a call to action for the insurance market and risk managers. The nature of risks are changing, and to remain useful and relevant insurance has to adapt. We need a change in mind set to encourage much greater collaboration between risk managers, brokers and insurers.”

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