More than seven out of ten (71%) of risk managers say their overall level of influence is greater now than it was three years ago, according to a survey of 500 companies in Europe, the Middle East and Africa conducted for ACE European Group.
The report, “The Changing Role of the Risk Manager”, highlights that influence is increasing most significantly in the areas of strategic decision-making (78%), digital technology and social media (76%), and supplier and business partner selection (73%).
More than one third of risk managers (35%) say their increased influence is driven by technological change, 29% by economic volatility and 27% by business complexity. However, technology is not only a driver of change, but also a source of worry for many risk managers, who named technology risk as their top concern in the ACE Emerging Risks Barometer 2015.
As the result of dramatic changes in the external environment, risk managers acknowledge the need for a new set of skills and tools. Almost eight out of ten (79%) believe that today’s risk manager must think like a futurist. Eighty one per cent agree that the use of big data and analytics will transform risk management in the future. Almost half (47%) believe it is very important for risk managers to be innovators.
The survey also captures risk managers’ concern about their ability to fulfil the demands of their changing role. Seventy eight per cent of respondents say that it is increasingly difficult to keep pace with the range of emerging risks they face, and only one in five feels very confident that they can manage these. Multinational risk is also a source of concern and over three quarters (77%) of respondents find it challenging to balance the need for centralised risk management with the need for local know-how on the ground.
However, there is also consensus about what tomorrow’s risk managers will need to confront these challenges. Respondents believe that the best approaches are to invest in certification and improving the professionalism of the risk management profession (32%), recruitment of risk specialists at organisational level (32%), and rotation of risk managers across the business to expand their experience (32%).
Mr Andrew Kendrick, President, ACE European Group, said: “It is encouraging that Europe’s risk managers are gaining greater influence in the boardroom – and right across their organisations. We are also pleased to see that over three-quarters of our respondents agree that a strong tripartite relationship between insurer, broker and insured is vital to help risk managers address their growing challenges.
“With businesses more exposed than ever before to emerging risks such as cyber and terrorism and increasingly operating across borders, we look forward to providing risk managers support that goes beyond traditional insurance policies and working with them to develop the multinational insurance programmes they need to ensure compliant, robust cover across multiple territories and jurisdictions.”
Ms Julia Graham, President of the Federation of European Risk Management Associations (FERMA), said: “The findings of the survey resonate closely with our own sense of how the risk management profession is evolving at FERMA. Risk managers are now expected not just to monitor but to lead, not simply to follow process but to innovate. And to lead, we need to continue the drive towards professional status, expand our skillsets and importantly, build a profession that is more diverse.”