Keeping up with an evolving strategic risk landscape
By Erica Seville
The insurance sector, like many others, is at an interesting juncture, as the nature of the strategic risks facing the sector evolves and anticipated time-frames for change shorten. At first glance, it is a sector populated by well capitalised, established and large incumbents. It is a sector selling products that consumers need - and are likely to need more of in the future. And yet, for all those positives, one also gets the sense that this is also a sector ripe for potential disruption.
Last week, Resilient Organisations Executive Director, Erica Seville, presented at the AON Hazards Conference. The theme for this year’s conference is apt - (R)evolution of Risk. As our climate, society and technology changes at an ever-increasing rate, insurers face particular challenges to understand and price risk effectively. This, coupled with growing expectations from customers requires that insurers shift gears for how they think about and manage risks.
None of us has a crystal ball. Odds are, the changes that occur will not be the ones we are expecting. We know that traditional ways of managing risks aren’t very effective at dealing with left-field events (the unknown unknowns). To deal with these sorts of risks, we need to focus more on shoring up the key attributes that grow resilience in an organisation: building a solid foundation of good leadership and culture throughout our organisations; focusing on buildings networks and relationships that provide support and buffering during times of turbulence; and fostering an organisational attitude and posture that is proactive and positive towards change. There is no rocket science about these three fundamentals – they are talked about in just about every management textbook. But all too often good practice isn’t common practice.
The innovation, creativity, and adaptability that will be needed to keep up with our evolving strategic risk landscape needs to be built now. This is a timely reminder for us all to think about how our own organisations measure up on these fundamental aspects of resilience.