A survey of more than 500 US risk management professionals by Lockton Companies shows that they face a growing array of challenges and new demands unforeseen even a decade ago.
The survey, to be fully discussed at Lockton's Complex Risk Symposium June 13 and 14 in St. Louis, shows that risk managers are increasingly involved with senior management and are more likely involved in strategic business issues, including M&A activity.
The findings show that the C-suite, and specifically CFOs, are increasingly interested in the balance between the risk retained and risk transferred. Additionally, CFOs are more interested in the appropriateness and efficiency of programs and not only focused on program costs.
Other key findings of the survey include:
- Regardless of risk management department size (from 1 to 6+), there are many issues facing risk managers, from performing risk assessments to building a stronger understanding of the business operations to creating better administrative processes along with departmental procedures.
- CFOs tend to focus on strategic issues and less on tactics. Cyber risk is the most prevalent risk that respondents identified that CFOs are interested in exploring. From understanding and quantifying the exposures related to cyber events, assessing the organizational readiness for such events, to the financial resources available to backstop such an event (current insurance program response and available insurance products). There is demand for more strategic advice as brokers' historical focus of transactional excellence and broad understanding of the insurance marketplace is considered ‘table stakes’ as opposed to the centerpiece of a broker's value proposition.
Ryan Brown, senior vice president and client advocate for Lockton Companies says the survey results point out that risk managers could become overwhelmed and mired in the day to day tasks of serving their internal constituents, and that it is difficult to make the all-important pivot to strategic issues. He says the survey results indicate that those risk managers able to tackle strategic issues have a "bigger seat at the table" with senior management by way of routine communication, involvement in broader organizational issues, and an integral role in M&A activities.