Evolving Risk Landscape Demands Strategic Role for Chief Risk Officers

Lane Clark & Peacock LLP (LCP), a consulting and analytics firm, has published research underscoring the evolving nature of the risk landscape in response to major developments in artificial intelligence (AI), climate change, and geopolitics. The study highlights the crucial role of Chief Risk Officers (CROs) in guiding businesses through these changes. According to LCP, businesses that include CROs in critical decision-making processes are better equipped to handle new and emerging risks.

The research, involving over 50 CROs and board members, emphasized the growing importance of automation and AI in risk management. 60% of CROs surveyed view the automation of routine work, especially in risk management, as a key development area. LCP suggests that advancing AI to support a ‘risk management engine’ can enable risk teams to cover a broader range of risks and allocate more time to business partnering.

Interestingly, 55% of CROs believe that cyber risk will be the most significant risk in the next decade, with 45% identifying climate change and AI as key future risks. Moreover, climate risk management emerged as the top skill CROs want to develop in their teams by 2030.

Ed Harrison, Principal at LCP, commented on the need for insurers to adapt to the shifting risk landscape, highlighting the increasing interconnectivity of risks. He emphasized the importance of the ’strategic CRO’, who links risk and strategy at the highest business levels, and a risk management engine that provides superior risk intelligence.