Four faces of the insurance company CRO
The scope, responsibility, and influence of the CRO continues to grow
Today’s insurance company chief risk officers (CROs) are expected to play four diverse and challenging roles.
Insurance company CRO: An evolving role
The insurance company CRO traditionally provides an independent review of new and in-force products, aggregates metrics across the enterprise, and oversees risk mitigation activities.
Today, the tie between enterprise risk management (ERM) and capital management has become ever more crucial, thus underscoring the additional expectation of the CRO to provide a capital and risk framework for the organization, inclusive of risk knowledge, definitions, cultural impacts, metrics, and reporting.
The CRO is also positioned more centrally than other executives to deliver key messages, both internally and externally, regarding complicated and conflicting valuation bases; technical insurance and market factors and processes; and how those complex elements dovetail with the company’s vision, philosophy, risk tolerance, capital policy and market strategy.
These expectations require today’s CRO to develop individually and across a function the skills, discipline and tools consistent with four distinct faces.
Traditionally, the CRO’s attention has been absorbed disproportionately by the steward and operator roles, focusing primarily on risk compliance, communication, and controls. Given the external factors impacting insurance companies today, CROs should enhance dedication to the catalyst and strategist roles to ensure risk awareness throughout the organization, collaborate with leadership on strategic business decisions, and enable growth.