Insurance Risk Management Study

The risks of doing nothing

The insurance industry is undergoing fundamental change, with significant consequences for the risk function. Disruptive forces—from medical breakthroughs to technological innovations—are reshaping society, business and the way insurers operate.


There can scarcely have been a more exciting time than right now to be in the insurance industry, and in the risk function in particular. But in this world of opportunities, complexities and uncertainties, what simple but powerful actions are available for CROs and their teams in the near term?

With the world in flux, some leaders are tempted to put their businesses into wait-and-see mode. This amounts to holding back major change while trying to assess the impact of technology disruption, new competitors, and complex threats and complications—such as economic protectionism, ransomware, persistently low oil prices and geopolitical risk from all corners of the world.

But the problem with the wait-and-see mode is that the risk of doing nothing could be greater than the risk of taking action—even when the best course is not certain. In our Accenture 2017 Global Risk Management Study: Insurance Report, we have identified six steps for all risk leaders to consider taking:

  1. Actively leverage internal knowledge

    Work to give risk professionals the time and freedom to achieve more, by automating drudgery and strongly defending the right initiatives. The function should continually challenge the company, and risk leaders should continually challenge the risk practice itself.

  2. Build a powerful risk radar

    Create and continually develop a dedicated emerging-risk working group that can identify and evaluate the nature of emerging risks and their potential impacts.

  3. Mix up the team

    Introduce confident generalists, experienced divisional leaders, and specialists from other fields into the risk function to create a more blended interdisciplinary team. Greater diversity—particularly of gender, age and nationality—can also add valuable new perspectives and strengthen the team.

  4. Report to the top

    Whether risk is officially part of finance or any other department, risk leaders need a channel through which they can routinely engage directly with the CEO and other members of the C-suite as necessary. This allows risk to have suitable influence, builds trust and facilitates integration with the business.

  5. Boost risk processes

    Increase the rigor of operational risk management and create a more effective and impactful operational risk committee that includes IT, compliance, legal, audit and vendor members.

  6. Get closer to the business

    Position risk as a trusted partner and get the function involved in decision-making instead of just being informed afterwards. Drive and campaign for better links between the company’s risk appetite and the risks managed by the function, and provide an overall risk perspective.

Be cool-headed, but be bold

Risk should set an example for the rest of the firm by taking cool-headed actions despite swirling uncertainty and frequent surprises. Whether it is a case of being more proactive about hedging equities or just carrying out more experiments to test impacts on the risk profile, the risk function should be active, bold and unafraid to innovate. Doing nothing can create the biggest risk of all.