Risk management influence rising but professionalism needed to take next step, finds ACE survey

An accompanying report into the changing role of the risk manager stresses the need for risk professionals to leverage collaboration between peers, insurers and brokers to achieve this goal. It says the days of discussions between risk managers and their insurance partners limited to property damage and liability risks are coming to an end. As risk managers become business partners with the ability to influence strategic decisions across their organisations they are looking for external support and insurers to play an advisory role that goes far beyond risk transfer, it adds. ACE released research yesterday based on a survey of 500 senior risk executives across Europe, the Middle East and Africa (EMEA). 71% of the risk managers polled believe their influence is greater now than three years ago. A significant 21% say it has risen significantly. Over three quarters (78%) of respondents feel their influence has increased specifically around strategic decision-making. 79% said that risk managers are increasingly a 'business partner' working collaboratively with relevant functions.hideA report on the survey's findings entitled The Changing Role Of The Risk Manager concludes that the risk management profession is on the rise. It notes that risk managers are increasingly expected to take strategic leadership roles within their organisations. However, it makes clear that while progress is being made there is still a way to go. The report considers the skills and behaviour that tomorrow’s generation of risk managers need to succeed. It says it is imperative that risk professionals expand their range of expertise with professionalism key to cementing hard-earned influence. It also concludes that risk managers must increasingly innovate and become masters of data. 78% of survey respondents said certification and professionalisation of standards are crucial to the future of risk management. These are key to ensuring that those responsible for managing risk have the right knowledge and expertise, they say. According to the report: "Professional standards for risk management are advancing, but practitioners believe certification is necessary for the future of their profession. One outcome will be better training and more learning materials for addressing the newer themes that risk managers must master to cement their status as business partners." Gaining acceptance as a business partner requires the development of skills beyond the traditional risk management remit, it adds. "Knowledge of digital technology and data is one [such skill], but so is the ability to communicate effectively with the board, CEO and CFO as well as with line managers," it stresses. Speaking at the report's launch in London, Andrew Kendrick, President of ACE European Group, noted that as risk increases companies are realising the need for expert risk advice. The means that the risk management role is on the up within most organisations, he said, pointing to the fact that chief risk officers have become commonplace in many industries. "Those associated with managing risk will have greater and greater importance as time goes on, so I see that the profession is on the rise," he said. However, he intimated that the journey is not complete and too many companies still see risk management and insurance buying as a 'second class'. "This industry from brokers to insurers to risk managers has often been classified as a kind of second class profession. Insurance is actually very professional...but I don't think that is recognised enough. So it is crucial to get that understanding and awareness from everybody within the profession and outside that this is a true profession," he said. Speaking at the research launch, Ferma president Julia Graham said that there is a lot of work going on currently to convert the risk management discipline into a profession and evidence that to the business world. Much of this work is focused around Ferma's risk manager certification scheme that will be launched at the federation's forum in Venice early next month. According to Ms Graham: "Certification is all about elevating risk management from a discipline to a profession. There is nothing wrong with disciplines but we are moving up to a profession." She congratulated ACE on its report and encouraged fellow risk managers to have a read: "We are tomorrow's risk leaders and I think this report really points to where we at Ferma feel the profession is going." Mr Kendrick said the need for collaboration between insurers, brokers and their clients is a key take-away from the research. "If insurers, brokers, risk managers and the clients that sit behind the risk manager all collaborate and share more information we get that opportunity for the risk manager to be taken far more seriously up the food chain and to advise on so many matters around risk. This is not just about insurance of course, that is just one part of risk management," he said. Ms Graham agreed and said insurers have an incredibly important role to play in giving risk and insurance advice. Clive Hassett, Director of Multinational Services, ACE European Group, said that more collaboration is needed to enable insurers to better respond to risk manager needs. “There has to be much more getting across the business to collect things that affect risk and then communication of those issues to insurers and brokers so we better understand and can respond to some of the challenges. Unless the risk managers understands, it is going to be very hard for us to understand what we are underwriting and develop covers that risk managers and their companies need,” he said.

Risk management influence rising but professionalism needed to take next step, finds ACE survey

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