Risk management will have a clearer strategic focus, forecasts Aon
Companies will have more chief risk officers, better risk data and more ERM opportunities in the future. This is Aon’s forecast of what the future holds for risk managers.
The broker made the prediction ahead of the Ferma conference in Prague, which has as its theme ‘The future of risk management’.
The broker launched its Crystal Ball predictions on how companies will and should shift their approaches to risk management.
Scott Nicholl, senior consultant at Aon Global Risk Consulting, added: “It’s crucial that risk managers need to think in the long term and are involved in strategic planning. This way, they will champion frameworks for managing risk that will be integrated across organisations and tangibly contribute to the organisation’s success through improved business performance and demonstrating compliance.”
The report also looks at how the insurance and risk industry must adapt to support global business in changing times, in addition to developments in captives and risk technology.
Marguerite Soeteman-Reijnen, chief broking officer in EMEA of Aon Risks Services, said: “The insurance industry must meet clients’ requirements and stand the test of time, particularly during economic despair.”
The highlights include:
• More companies will appoint Chief Risk Officers - to meet growing risk, governance and continuity expectations, an increasingly broad skill set will be required to go beyond simply introducing best practice policies and procedures to fundamentally change behaviours.
• ERM to focus on managing opportunities in addition to threats - risk management must become an integral part of other management processes, such as product development. Proper consideration of risk at the outset minimises downsides and proactively manages product opportunities at the time when influence and control are high, and cost of doing so is low.
• Increased quantification of risks to achieve better understanding of exposures, devise strategies and improve broking negotiations - more data and objective performance indicators will be used to ensure that a company identifies and grasps the issues that may have a negative or positive effect on their balance sheet.
