The risk landscape is said to be evolving in response to developments being seen within major areas such as, artificial intelligence (AI), climate change, geopolitics, and more, according to research published by analytics and consulting firm, Lane Clark & Peacock LLP (LCP).
However, LCP stated that general insurance Chief Risk Officers (CROs) play an important role in influencing strategy, and businesses where CROs have a “seat at the table” as part of important decisions tend to be “the best prepared” to tackle new and emerging risks.
The research conducted by LCP, which was performed in collaboration with over 50 CROs and board members, also identified the importance of greater use of automation and AI, combined with strong relationships between the risk function and all parts of the firm.
Over half (60%) of CROs said that the automation of routine work will be an important area of development, particularly when it comes to routine risk management work.
LCP noted, that by taking this further and developing an AI-supported “risk management engine” will allow for risk teams to expand further into a broader range of risks whilst also freeing up more time to spend on business partnering.
Interestingly, 55% of CROs said that cyber risk will be the top risk in ten years, while 45% said climate change and AI will be the key risks.
At the same time, climate risk management was ranked as the top skill that CROs would most like to develop in their teams by 2030.
Ed Harrison, Principal at LCP, commented: “Insurers face a dramatic shift in the risk landscape, driven by megatrends in AI, climate change, geopolitics and culture. At the same time, risks are becoming increasingly interconnected. Risk teams must evolve, too. The risk function of the future will fuse data-driven insight and human judgement seamlessly to help the business balance risk acceptance and risk mitigation as the ground rules keep changing.
“Central to the risk function of the future will be the ‘strategic CRO’ who connects risk and strategy at the highest level within the business, and a risk management ‘engine’ that delivers better risk intelligence than ever before.”
