Risk management off the pace as technology evolves
Risk professionals are not keeping pace with disruptive technology impacts and need to take a broad view across their organisations, according to an annual report by Marsh and the Risk and Insurance Management Society.
About 59% of survey respondents say their organisations are using or exploring the use of the Internet of Things (IoT), 47% mention artificial intelligence (AI) and 24% blockchain.
But only 14% strongly believe they have a clear process for addressing disruptive technology risks and nearly half cannot say there is a clear process.
When asked what it means for their organisation to be “digital”, a majority cite operational improvements such as automating processes, while giving less attention to growth initiatives such as new ways of doing business and interacting with customers.
“Emerging technologies such as AI, blockchain and IoT are fast becoming the new normal, yet risk management is not keeping up,” Marsh North America Chief Client Officer Brian Elowe said.
“Only by asking questions and understanding the underlying technologies and their uses throughout the organisation can risk professionals truly appreciate their risks and respond accordingly.”
The report says risk professionals’ input will be increasingly sought on strategic decisions, with disruption rapidly becoming the new normal.
“Failure to develop the needed insights and connections could put the risk function in the background as their organisations move ahead.
“Fortunately, both the desire and the talent to play a leading part are there.”
Risk managers do not need to understand the intricacies of every new technology “coming down the pike”, but should feel comfortable talking to experts about technologies their organisations are using.
In other findings, 40% of respondents would consider switching insurers and other advisers based on their ability to provide innovations in the claims area.
The report, called Maintaining Relevance Amid Technology Disruption, is based on 450 responses to an online survey and focus groups with risk executives.