According to the report, which was based on a detailed survey and qualitative interviews with Airmic members and the wider insurance market, the profile of risk management within most organisations is higher than it has ever been, and the importance of risk is now widely recognised at board level. This trend is set to continue, with eight out of ten respondents believing that the value of risk management to businesses will increase in the next three years. The same proportion believe it will become a more regular boardroom item.
The survey, published at Airmic's annual conference in Birmingham, also revealed a striking change in the nature of risks causing businesses the biggest concern, with nearly all of the top ten risks being non-traditional in nature. Loss of reputation or brand value was the top concern for risk managers, with risks related to cyber the second and fourth. Market developments such as increased competition and market stagnation was the third most pressing concern.
Emerging technologies, such as artificial intelligence, and disruption to business models caused by these new technologies were the fastest growing risks. Almost a quarter of respondents anticipate these becoming a top-three concern in three years' time.
"The degree and pace of transformation is far greater than we imagined. Risk professionals are dealing with a risk landscape that is moving faster than ever before and in many dimensions at the same time," Julia Graham, Airmic's deputy CEO and technical director, commented. "These are not future developments - they are happening here and now. As a profession, we need to adapt, upskill in certain areas, and adopt a different way of thinking in order to rise to the challenge."
Julia Graham - deputy CEO and technical director, Airmic
Risk managers are aware of the magnitude of change, with three quarters believing that the risk profession must undergo significant change. While the research suggests that the profession is responding positively to the increasing demands, it also revealed several areas of challenges.
For example, risk managers are having to rapidly acquire a broad range of skills and experiences. Use of technology and data analytics are two key areas. More than a third of risk managers (35%) say that their use of analytics tools today is limited, but within three years, more than half of risk managers (56%) expect to be using data analytics extensively in their roles.
The report also showed that a silo mentality to risk pervades, and revealed a clear need for risk managers to develop stronger networks across organisations. Only half of respondents have regular and close collaboration with information security, for example, despite cyber being perceived as one of the biggest threats.
The report, A profession in transformation: driving business value through risk and insurance management, is based on the responses of 152 risk managers at companies of varying sizes and across a range of business sectors, as well as on a series of qualitative interviews. The research was conducted in March and April 2017 in partnership with Longitude, provider of world-class expertise in thought leadership and research.