Identifying emerging risks and their potential impact is critical to any organization’s ability to achieve business objectives and longer-term strategy. This session at RIMS 2021 investigated various practices in recognizing and assessing emerging risks.
- Jana Utter, Vice President, Enterprise Risk Management, Centene Corporation
- Lorie Graham, Chief Risk Officer, American Agricultural Insurance Company
- Suzanne Christensen, Chief Risk Officer, Invesco
- Justin Smulison, Business Content Manager, RIMS
Emerging risks can come in many forms – they can be novel (not seen before), evolving (behaving differently than they one had) or known/unknown (knowledge of the risk existed, but it just now affects the organization). All of these risks come from a tremendous amount of change, so it takes dedicated resources to identify, evaluate impact, monitor and measure.
There are several models and databases to track and predict risks, but it is also important to listen to lone voices. You can survey your organization to help identify what all employees perceive as the greatest risk and the challenges associated with them. This is an effective way to find out what is new and may not already be included in your corporate risk assessment. If you have the resources, in-person interviews with top leadership is also valuable because of the ability to discuss their answers. Other companies pull together emerging risk task forces that include representatives from every discipline within the organization and meet regularly.
Consistent reporting is important to show executive management what risks may be impeding corporate goals. Reports could include elements like sources, internal impacts, external impacts and affects by geographical location. Rank them so that the most-threatening risks are highlighted. Report timing should be tailored to annual strategic planning meeting dates in your organization so that you can provide results during these strategy discussions. It is also important to include elements from these risk reports in your crisis planning.
To keep up with emerging risks, do your daily reading. You can use data from sources like the U.S. Census, RIMS and the National Actuarial Society, however, there are other unique ways of identifying risks. Do not just look at your industry. You can find trends in other sectors that can pop up in your sector as well. Look beyond the obvious resources. For instance, there is an enormous amount of intel on emerging risks in various Ted Talks. It is also important to network and talk to as many people in your circle as you can. Those in your network can make you aware of what they are watching.
The pandemic has helped to change the way risk managers look at risks altogether. The C-suite has never been more zeroed in on risk management, so it is important to not to let this attention go to waste. It also has made potential cyber security risks real now that entire workforces are working from home, creating more exposure for their organizations. Finally, it has helped widen the net as to which other departments need to be aware of the emerging risk reporting because they may have to be involved if the risk does occur. This could include departments like Compliance, Government Relations and Communications.