Global Risk Management Survey
Financial institutions have strengthened their capabilities to address market, credit, and liquidity risks, but are now facing a new set of demands as it confronts a number of looming nonfinancial risks. Insurers will need to take new approaches to respond to this rapidly evolving environment.
Insurance companies will need to transform their risk and capital management programs to manage a variety of economic threats and changing regulatory requirements. Rather than remain content with traditional approaches, the new environment will require a more intense focus on nonfinancial risks, such as cybersecurity, investments in improving risk data governance and IT systems, and the reassessment and retooling of the three lines of defense risk governance model.
Perhaps the most significant break with current approaches will be ushered in by digital technologies. These technologies are enabling insurers to develop innovative new products. They’re also freeing risk professionals from repetitive tasks to instead focus on identifying emerging risks and adding value. The more rapid pace of product introduction made possible by digital technologies, however, can be out of sync with the more deliberate pace of regulatory response. Insurers will need to determine how close to the leading edge of innovation they want to place themselves, while at the same time closely monitor evolving regulatory requirements.
Read our insurance spotlight for insights into the new approaches that insurers will need to take to respond to this rapidly evolving environment.
Five key takeaways:
- Growing focus on nonfinancial risk
- Leveraging advanced technologies
- Enhancing risk data and IT systems
- Retooling the three lines of defense model
- Keeping pace with ongoing regulatory change
Global Risk Management Survey, 11th edition
The 2018 survey interviewed chief risk officers or their equivalents at 94 financial institutions around the world, representing a total of US$29.1 trillion in aggregate assets.
The survey posed key questions on the current and developing risk management challenges these institutions face and the steps they’re taking to address them. The survey’s key findings include:
- Continued growing importance of cybersecurity risk
- Increasing focus on nonfinancial risks
- The potential of digital risk management
- Addressing the challenges in the three lines of defense risk governance model
- Increasing reliance on stress testing
- Stronger board oversight
- Widespread adoption of the chief risk officer (CRO) position
- Continued increase in the adoption of enterprise risk management (ERM)