2016 in review: a watershed year

It is fair to say that 2016 has been a year of surprises.

Twelve months ago, who would have believed that by the end of the year Britain would be heading out of the EU with a new prime minister, Donald Trump would be president-elect and Ed Balls would become the nation's favourite underdog!

It's been a tumultuous year both on the domestic and global stage. But the beauty of our business is that a topsy-turvy world makes risk and insurance professionals all the more vital to businesses.

Indeed, for me, this year has been a real turning point in business attitudes to risk management.

Boards want a qualitative discussion on risk

There is no doubt that risk management has shot up the boardroom agenda. We've seen this in surveys of our membership: last year, 43% cited lack of access to the board as a number one or two concern. In 2016, this had reduced to 18%.

But it has also been evident in our conversations with the board directors of FTSE 100 companies. They are concerned about the growing complexity and interconnectivity of today's risks - with cyber at the top of the list - and, as a result, are looking for more input on risk management. They now want a qualitative discussion on risk, not a compliance discussion.

Attitudes have of course shifted gradually over several years, but 2016 has seen a step-change, helped in no small part by the FRC guidance on corporate governance. The message is getting through that risk is intrinsic to reward and reward is intrinsic to strategy.

This is good news for business and good news for Airmic members. The boardroom door is clearly open to them like never before.

Out of your comfort zone

Knowing how to push on that door, however, can be challenging, and may take some of our members out of their comfort zone. Preparing our members has been an important part of Airmic's strategy this year.

For the first time, we've had more risk management initiatives on our technical agenda than insurance initiatives, and we were thrilled with the success of our first ever ERM Forum. This will continue into 2017 with the launch of our Professional Development programme, designed to equip our members with broader business skills that go beyond risk and insurance.

Don't forget the Insurance Act's raison d'etre

It has also been a watershed year in the insurance market, with the Insurance Act going live in August. Now we must watch and wait to see its impact, but early signs show that our members have received a good response from their brokers and insurers.

We are, though, seeing hints of somewhat defensive play by both buyers and sellers - extra use of lawyers or increased use of conditions precedent, for example. As we go into the new year, we must not lose sight of the Act's raison d'etre: achieving professionalism and best practice.

Overall it's been a benign year for insurers, but with the soft market showing no end in sight, focus has inevitably turned to costs.

We have seen reduced headcount, and not just in back office roles. Understandably, our members are concerned that this will affect services. We understand the pressures on insurers in the current market, but my hope for 2017 is that all-important investment in innovation and the client-time our members so value are not the casualties of the soft market.

2017: Roads to Revolution

Looking ahead to 2017 and beyond, we are anticipating a rapid transformation of the business landscape as the digital revolution takes grip. Business models are changing as the world becomes ever more connected and interconnected.

The risk community, like all business areas, needs to adapt to the new world order. This will be our key challenge next year as we seek to answer the question of how the digital revolution is altering the fundamental principles of resilience. Our work will culminate in the third part of our flagship Roads series - Roads to Revolution.

At this time of year, our press is peppered with predictions from so-called experts for the year ahead. I am not even going to try. The truth is, we don't know. Our job in the risk community is not to have a crystal ball, but to make sure our businesses are resilient to whatever comes their way. Good luck, and a happy new year to all our members, partners and sponsors.

John Hurrell, Airmic CEO.