Managing tomorrow’s risks today: Julia Graham

Airmic has been focusing on a matrix of issues this year with the mega risks of geopolitics, geoeconomics, climate change and cyber high on its agenda, along with AI, insurance and the need to improve talent, explained CEO Julia Graham.

“Take the mega risks of geopolitics, geoeconomics, climate change and cyber and overlay these with a connecting matrix of artificial intelligence, supply chains, risk financing, sustainability, talent and governance, which creates a high level 3D picture of what risk professionals face, what we are focusing on at Airmic and the themes on which our 2024 conference programme is based,” she said.

Graham believes geopolitics, particularly in ‘the year of elections’ and with an increase in armed conflict, is currently the front of mind issue for many business leaders.

“Today the risk professional must be able to keep their eyes focused on the horizon with agile risk radars. The gamechanger at the moment is the number of elections taking place across the world,” said Graham.

“While the focus in the UK has turned towards 4 July, 400 million Europeans from 27 countries will vote in June. The results will shape the direction of the EU over the next five years on key issues. The right-wing and the far-right have made significant gains across Europe and the election results will doubtless influence the next European Parliament. This should concern us all and with a focus in the Republic of Ireland as well as the UK, we have a specific interest in the outcome at Airmic,” she added.

Meanwhile, global shifts toward sustainability and associated new reporting and regulatory requirements, stakeholder engagement and workplace diversity, the impact of mega risks on supply chains and the knock-on effect on wider economies, are on all risk radars, continued Airmic’s CEO.

And Graham noted that cyber risk has appeared near the top of every survey conducted in the last year. “The blurring of the boundary between human and digital is gathering pace and while some of the negative heat about AI has cooled, AI presents opportunities to the bad guys as well as the good guys and it will have an impact on the frequency and scope of cyber risk and the cover and pricing of cyber insurance,” said Graham.

Then there are subjects that run across the piece and affect all of these risks – with talent and risk transfer perhaps at the top.

“Talent and having the right talent with the right knowledge and skills in the right place touches all of the mega risks. Organisations can have the best risk management tools and techniques, but people need to know how to use them and get the best out of them. We are considering how Airmic can further support the professional journey of risk professionals and specifically the data and technology development needs of our members,” said Graham.

“Then, as part of our highly acclaimed ‘Roads’ series, we are looking at what the future holds for the relevance of insurance and other forms of risk financing, including captives. How are insurers, reinsurers and brokers preparing for future technology challenges and opportunities, including the impact of AI, and associated regulations,” added Airmic’s CEO.

She said the insurance gap remains a subject that needs urgent focus. Underinsurance helps no one and is increasingly on risk registers, she added.

“Although the market is not as harsh as it was, there is a demand for retained attention on public-private initiatives, which are likely to take the back seat until the flurry of elections and the diversionary effect of these have passed. The lobbying for the UK as a captive domicile is an example where the momentum should be sustained,” Graham said.

Airmic’s approach to helping members deal with AI risks and opportunities has been carefully crafted. Over the last 12 months, the association has thought about whether it would be best to address AI as a separate subject or embed AI as part of its learning, events and thought leadership agenda. It decided on the latter.

And Graham stressed the importance of members turning their attention to AI now. Airmic thinks that this subject is simply too important to put on the back burner.

“AI is already an established part of our present and future world and the context in which organisations operate, and we will consider AI in everything we do. Some Airmic members polled in 2023 saw AI risks as still ‘out there’ on the horizon and, as such, not an immediate priority. However, these risks and opportunities are with us today and cannot be on the risk back burner. We have long advocated the use of horizon scanning and scenario analysis as tools for managing emerging risks,” Graham advised.

The impact of AI clearly extends to insurance. Graham believes its effect on the market, and what and how it can deliver for customers, could be huge.

“For example, if there are unintentional variances in policy wordings from the same insurer, the use of AI can contribute where beneficial to the harmonisation and improvement in consistency and clarity of covers and wordings. At our 2024 conference there is a workshop with the International Underwriting Association (IUA) and law firm Herbert Smith that will touch on the impact of AI on wordings and paying claims,” she said.

Graham also thinks that technology, and perhaps ultimately AI, will help insurers ensure they can get documentation out more quickly and on time.

Airmic will be launching its new Risk Management Fundamentals course in Edinburgh, which aims to help build risk expertise. It is a two-day course for people that are either relatively new to risk management or want a comprehensive overview of what managing risk is about, including those that work in other parts of the business such as finance and human resources. The plan is for the course to be offered in person or online from September.

“The course includes the importance of the relationship between risk and managing risk with managing insurance, as well as providing an introduction to concepts such as high impact, low probability risk, and current thinking about crisis management – all of which are rarely featured in courses like this,” Graham explained.

And she stressed the importance of Airmic members having the right skills to take advantage of mounting, strategic opportunities.

“Everything we have covered in this discussion demands risk professionals step up to deliver their responsibilities as strategic risk advisors to their top management. However be warned, having courage is easy but being courageous without a foundation of relevant knowledge and skills can be career limiting and your top management might not invite you back to the table if you don’t deliver,” said Graham.

This year has also seen Airmic continue to push into Ireland and across the UK regions to better support members in these areas. It returns for a third conference in Dublin on 3 October. This work is being underpinned with a series of Ireland and EU-focused webinars – with Insurance Institute of Ireland CPD accreditation, where relevant.

The association ran a regional meeting in Birmingham in May and is running a similar event in Glasgow, Belfast and Manchester later this year. “Our members have said they would like to see more of Airmic in the regions and that is what we’re been doing,” said Graham.

The association is also running its first joint event with the Guernsey International Insurance Association (GIIA).

“GIIA and Airmic have worked closely together for some years, and we agreed that we should develop our relationship further by running a joint conference in Guernsey with the theme of ‘Positioning for the future’, starting with a reception on 24 June followed by a day packed with speakers, panels and breakout sessions covering a range of topics, ending with a relaxed gala dinner on 25 June. Attendance is free for risk professionals and places are filling up fast,” explained Graham.