AMRAE sees rich potential for RMIS in complex risk landscape

Rising natural disasters, Covid-19, the conflict in Ukraine, the global supply chain crunch, coupled with the compliance demands brought by complex climate change and ESG requirements, all pose serious questions about the way that risk managers identify and manage risks. The significant challenges faced by Europe’s risk and insurance managers as they tried to secure adequate coverage at an acceptable price against this turbulent backdrop during recent renewals have also raised big questions about the way the market works. Insurers demand ever more detailed information from risk and insurance managers as they attempt to work out the true cost of risk. This is made even more challenging as inflation bites around the world. For all these reasons, French risk management association AMRAE believes that risk management information systems (RMIS) will become more important than ever before and, at the same time, will have to evolve and adapt to meet the rapidly changing risk landscape. These are the core conclusions of the 14th edition of the Risk Management Information Systems Panorama report that AMRAE published this week at the Rims conference in the US, in partnership with EY and Club FrancoRisk, Ferma, Parima and Rims. The report is based on the combined analysis of three international surveys: the first with the RMIS vendors (131 vendors listed, 55 respondents); the second with risk managers, mainly at large international companies (228 respondents), to collect their vision of RMIS and their utility; and the third with brokers and insurers on the use of RMIS. The analysis found that the RMIS market remains dynamic in terms of requests for proposals, despite the recent crises for all sectors and all company sizes. For a large majority of RMIS vendors, a tool can be implemented in less than four months, and the average annual software-as-a-service cost of a RMIS, excluding integration services, is €100,000. The main benefits of RMIS, as perceived by risk managers, are in increasing efficiency and analysis capabilities, improving information sharing and avoiding silos. RMIS projects have the positive effect of frequently (94%) bringing together the traditional assurance functions (risk management, audit, internal control, insurance, compliance, etc) around a common approach. Ease of use and reporting capabilities remain the main criteria for selecting a RMIS, even if this last criterion is not met by nearly half of the risk managers surveyed, reports AMRAE. The average level of satisfaction among risk managers with RMIS remains stable, but the survey found that progress still has to be made in terms of innovation, interface management (data sharing) and reporting. Risk managers are most satisfied with modules that cover incident management, internal control and risk mapping. The survey found that artificial intelligence is still not often integrated into current RMIS. However, the survey findings reveal that this is an area of development, as one third of vendors that do not already incorporate AI wish to do so. “In the insurance field, the RMIS acts as a formidable transformation tool by accelerating the digitalisation of the insurer/broker/insured relationship,” states the report. François Beaume, vice-president risks and insurance at electrical products distribution group Sonepar, said the rapidly evolving risk landscape demands a deeper and more efficient use of technology by the risk and insurance market. “The waves born from the Covid-19 crisis continue to evolve, natural disasters follow one another here and there, the conflict in Ukraine takes hold and beyond the countless human dramas, disrupts the balance of world trade, supply, production and distribution channels,” he said. “These crises of unprecedent scale and duration in recent history call into question the current methodologies for identifying and managing risks. They will lead RMIS to evolve further. Risk mapping, incident management, risk control and action plans remain the modules most expected by risk managers in their RMIS,” added Beaume. Climate change and ESG also demand a better use of RMIS. “Climate and CSR or ESG risks, as well as compliance ones, also generate new needs and expectations. Already today, but even more tomorrow, the use of RMIS is becoming an essential part of the daily life of risk managers,” he said. And RMIS offer great but as yet largely untapped potential with renewals. “Within the framework of corporate insurance policy renewals, which were very complicated again this year, some risk managers, although still rare, have opened their RMIS to their brokers and insurers to streamline renewals,” added Beaume. The English-language version of the Panorama report can be seen on the AMRAE website at www.amrae.fr. The French language version will be published within the next few weeks.

AMRAE sees rich potential for RMIS in complex risk landscape

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