Technology has become ingrained in nearly all aspects of modernsociety. As it evolves over time, so too do the risks that comewith it.
|Businesses today need technology to compete with others andadvance their product. To calculate the number of risks theymay face, risk management professionals need to understand thecompany from top to bottom. Yet risk management processes are notkeeping pace with technology's associated risks, according to a newreport by Marsh and RIMS.
|The 15th annual Excellence in RIsk Management report delvesinto risk professionals' knowledge of and role in managingtechnology innovation such as artificial intelligence (AI),blockchain and the Internet of Things (IoT). Overall, surveyrespondents did not feel that they have enough knowledge aboutthese disruptive technologies to contribute to discussions aboutthem at a “strategic advisor” level. The findings from thereport were released today at the RIMS 2018 Annual Conference &Exhibition.
|Related: D&O policy elements, exclusions risk managersneed to know
|Three technologies impacting insurance and risk management
For risk executives, AI can enhance risk-related insights anddecision making. For example, automated analysis of large trends ofloss reports can help to identify trends in a manner that would nototherwise be possible. But the survey notes that one key to an AIstrategy for managing risks is to first get the data and analyticsside of the house in order.
|Blockchain has the ability to provide a range of benefits in therisk and insurance ecosystem. It can easily lead to cost reduction,around-the-clock data accessibility and fraud detection. However,only 24% of respondents said their organization either uses or isexploring the technology.
|IoT systems allow enterprises to make value-adding decisions inreal time, with increased flexibility regarding their approach toefficiency, cost reduction and risk modification. But it'simportant to acknowledge the possible downsides. IoT increases theloss potential from data security breaches as more sensitive dataare being created and stored on networks.
|Related: Top cyber risks businesses should prepare for in2018
|Risk committees continue to be underutilized
One of the ways risk managers can further strategic discussionsaround technology and innovation is by assuming a leadership rolein their organization's cross-function risk committee.
|The survey found about 60% of organizations said they have sucha committee. Among those who said they do not have such acommittee this year, 35% said their company should have one.The collaboration from such a committee can help generatediscussion and alignment around everything from innovative uses ofdata and risk finances to capital expenditures.
|The future of insurance and risk management looks promising ifAI, blockchain and the IoT can be strategically used. Withdisruption rapidly becoming the new normal, risk professionals willneed updated insights to help them make the best strategic decisionpossible going forward.
|Related: Career longevity advice from a 'risk manager forlife'
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