Digitalisation creates new challenges for risk managers, who will need to take leadership, AMRAE president says
Companies need to take new risks, be proactive, review their business model and be innovative, or risk being disrupted by new competitors.
This will be one of the key messages of Brigitte Bouquot, AMRAE president, on opening the conference.
Speaking to StrategicRISK ahead of her opening speech today, Bouqout said digital transformation will also create new challenges for the risk manager, who will have to gain leadership on all the topics linked to digitalisation, such as data privacy, changes to the business model, legal uncertainties and changes to the risk pattern.
“The risk manager will need to be a leader, to educate people about cyber security and to find good cyber insurance coverage. But ultimately digital transformation is decided by the C-suite, so this is not only an operational risk, but also a corporate one,” she explained.
“It is a challenge for the risk manager to ensure that people are aware of their behaviour, because if something goes wrong, it will have a strong impact on the company’s reputation. It will also hit the board, the CEO or the CFO, so directors are more concerned about this topic as well.”
Furthermore, digital transformation is taking place in a very uncertain macro environment. After a surprising 2016, nobody is able to predict what political, economic or financial changes this year will bring. “That means our usual ways of transferring risk and working globally are more volatile and also a little more uncertain, so it makes it even more complex.”
As business models are transforming, risk managers will have to be fully involved in the use of data, Big Data, algorithms and the use of data science. “For me, the first challenge of digital transformation is the use of data and deploying the EU’s new General Data Protection Regulations, which is a key topic and risk managers need to be very careful to adhere to this new legislation.”
Bouqout also highlights the challenges around the Internet of Things, particularly in relation to liability, and how digitalisation is affecting the insurance and broking industry.
“The industry will become more predictive and it will completely change the way the risk manager is working. The way we are setting up our global insurance programmes and the way we are managing our prevention and protection policy will be disrupted by the way the insurer and the broker will use Big Data. It is something we have to take into consideration and risk managers need to be aware of what the changes are.”
Operating in an increasingly digital world will also require risk managers to possess certain behavioural traits and to keep up to date with the latest insights and developments in risk management.
“In terms of behaviour, risk managers have to become increasingly more confident and need to act in a transversal way. They have to be able to cooperate with the CIO and the security officer. They will have to go out of the box – risk management and insurance are no longer alone in their silo, if ever they have been. It is the risk manager’s duty to be able to communicate with and understand what each department inside the company is doing with regards to digital transformation,” Bouqout said.
On top of that, they need to keep their skills and knowledge up to date. “Risk managers will have to join AMRAE or FERMA for example, to get some insight and to inform themselves of what is the state-of-the-art in risk management and insurance in this area. At AMRAE, we publish position papers on cyber risk, cyber security governance, main recommendations for cyber insurance and so on. We are putting a lot of effort into providing the latest thinking and tools to help the risk manager so that they are completely up to date.”
This year marks the 25th anniversary of Rencontres and the association wants to celebrate the fact that risk management is entering into a new kind of maturity.
“We will try to remember where we came from, to be able to better plan for the future. What will be the risks in the next 25 years? This will be the theme of a plenary session on Friday, which will include some video interviews with French business leaders on what their views are in terms of risks, what they learned in the past 25 years and how they see the next 25 years. We will try to gather as many opinions as possible to give our 600 risk managers the energy, motivation and courage to go back to their jobs and continue to develop the risk management function and tackle all the challenges,” Buoquot said.