Emerging and sustainability risks challenging the traditional Enterprise Risk Management
The importance of emerging risks in daily business steering and management keeps growing in line with the increasing prioritization of long-term and sustainable goals in a complex and rapidly evolving market context. Environmental sustainability, digitalization and geopolitical situation represent key trends as well as relevant challenges that need to be properly addressed considering insurers’ social role of protection providers and long-term perspective investors.
Risks previously faced, are now being more and more understood and modelled thanks to sophisticated risk mitigating practices granting well equipped risk managers’ cockpits.
A number of risk mitigating practices have been developed for managing major risks, but due to a rapidly evolving market environment, an enhanced risk identification is currently required needing expertise as well as a keener eye on monitoring external contexts.
Emerging risks can also lead to opportunities. Given that the key role of insurers within society is customer’s protection, the right understanding of risks related to each trend is fundamental to provide the best risk coverage to customers, minimizing the insurance gap and properly managing all related risks. Therefore, generated risks and opportunities are a core dimension which cannot be distinguished from emerging risk management. The increasing embedding of ESG (environmental, social and governance) factors within the risk management processes is an unavoidable lever for success.