The Future of Risk Management
Whether it is black swans, emerging risks, artificial intelligence, the global economy, demographic shifts, or any number of other issues, the future of risk management is evolving and regularly being reassessed and forecasted. This session at WCI’s 2019 Workers’ Compensation Educational Conference explored the issues that are impacting the risk discipline and set the stage for what is to be expected of risk leaders of the future.
- Soubhagya Parija, Chief Risk Officer, NY Power Authority
- Brad Waldron, Vice President, Risk Management, Caesar’s Entertainment
- Guy Fraker, Chief Innovation Officer, ITL Advisory
- Chris Mandel, Senior Vice President, Strategic Solutions Director Sedgwick Institute, Sedgwick CMS (moderator)
Over the years, risk management has evolved from that of purchasing and procurement to that of prevention and strategy. Risk managers are navigating into new and diversified areas for the discipline.
Technology is a large contributor to this evolution. Digital risk management should equip decision makers with knowledge and balanced decision-making framework. It engages leaders to understand their digital risk profile in the business, as the business, the impact of higher speed, the strategic impact, the operational impact and the governance impact. Risk managers must determine how to capture and manage info for a richer set of data, use analytics to improve accuracy and consistency and acquire technological skills to enable digital risk resiliency within their organizations.
Risk managers now have to consider:
- The impact of AI, machine learning and blockchain.
- The evolving skill set, background and capabilities.
- The impact of industry disruption.
- The impact of shifting workforce demographics.
- Increasing frequency of black swans and emerging risks.
- The paradigm shift from expected to unexpected losses.
- Impact of societal norms and impacts.
- Methods to quantify risks for better decision making.
Insurtechs are making huge efficiency gains in insurance and risk management, getting more funding by the day. Insurtechs have been disruptive, forcing insurance companies to push themselves past their previous comfort zones. Outcomes have improved significantly as companies embrace this creativity.
Panelists believe that risk management is not necessarily poised to keep up with rapid digitization. Currently, risk management is stuck in modeling with little willingness to deviate from the tried-and-true model. There could be a shift once more-fluid risk management techniques arise that re-quantify risks. Change is starting to slowly occur and it may take a challenge from organizational leaders to force risk managers to evolve.