REPORT: Excellence in Risk Management - State of Risk Management in India
In an increasingly complex, volatile, and interconnected world, risk management has assumed greater significance. Technological advancements have revolutionized business practices but, at the same time, are posing new sets of challenges.
In India, risk management teams are now expected to take on a greater role not only in terms of leading risk governance and compliance, but also actively influencing strategic growth decisions by addressing new and emerging risks. Consequently, risk managers are constantly looking at avenues to expand their knowledge base, hone their skillsets and gain access to best practices, tools and technology.
At this unique juncture, Marsh and RIMS, the risk management society™ decided to collaborate and produce this joint study which sheds light on the maturity of risk management functions within corporate India, along with the top risk concerns for corporate India. This study, Marsh RIMS Excellence in Risk Management – State of Risk Management in India, addresses the following areas of interest:
- What are the top risks Indian corporates faces?
- How mature is risk management in organizations?
- What are the key areas of risk management that require improvement?
- What are the risks of adopting emerging technologies?
- Key recommendations for risk executives.
Some Key Learnings and Takeaways
- Large scale cyberattacks and massive incidents of data fraud or theft continue to be perceived as top risks for corporate India. India’s growing dependencies on data and digitization efforts have increased the risk of cyberattacks. Cyber risk management also emerged as a key focus area for risk executives with 70% of respondents expecting an increase in investment, which is aligned to cyberattacks being chosen as the top critical risk.
- Extreme weather events on the back of recent events continue to be perceived as one of the top risk concerns for corporate India. According to a report by Lloyd’s, India has one of the largest insurance gaps globally for natural catastrophes with a penetration rate of less than 1%, highlighting the vulnerability businesses face when extreme weather events occur.
- Severe energy price shock and failure of major financial mechanism or institution also emerged as some of the other top risk concerns highlighted by corporate India.
- The interconnected dynamics of geopolitics, technological advances, global economic integration, social instability and climate change mean that the manifestation of one risk is increasingly likely to influence others. This interconnectivity and interaction of longstanding and emerging risks, is creating even more unique and unpredictable risks making it even more difficult for organizations to identify risks.
- Most risk professionals, C-suite executives, and finance professionals generally agree that forecasting critical business risks is more difficult today than before and won’t get any easier in the next three years
- Highly crucial for organizations is also to ensure that risk management integrates with the strategy and values of the organization and then setting it in stone by implementing risk management processes within the day-to-day business.
About This Report
This report is based on 123 responses to an online survey with C-suites, executives, and risk professionals from leading firms across 19 industries conducted by Marsh and RIMS in September 2018, along with expert input from MMC and RIMS.