Because insurance companies are in the business of managing risk, they often lead the way with their own risk management programs. In fact, 95% of insurers have an enterprise risk management program in place or are implementing one, according to Deloitte’s Strategic Risk Management in Insurance.
As insurers’ risk of disruption increases because of technology, economic and consumer trends, however, they would do well to adopt strategic risk management (SRM) principles.
SRM addresses risks that are disruptive to a company’s value proposition or business models, and also looks at a risk’s “flip side,” which may reveal opportunities for growth. For example, while driverless car technology could pose a threat to the auto insurance market, it could also lead the adoption of new devices for insurers to monitor and assess risks. Approaching risks in this way can help insurers capitalize on challenges and stay ahead of the competition.