The 2019 Excellence in Risk Management Report from Marsh and RIMS looks at how capital and data are changing how risk managers understand and finance risk.
Risk management executives today operate in a time of abundance in two key areas: capital and data. By effectively marshalling data and risk modeling tools, organizations can better understand changes in their risk profiles and their risk bearing capacity, allowing them to access the opportunities presented by the growing levels of capital available to finance risk. The reward for those that get it right is to build a robust risk finance strategy and more resilient organization.
But making effective use of risk data remains a stumbling block for many companies. In fact, the 2019 Excellence in Risk Management survey found that organizations’ top priority for improving risk management capabilities is to improve their use of risk data and analytics. Again.
This has been the top priority each time we’ve asked the question since we first started doing so in 2013.
At the same time, many respondents were unfamiliar with alternative risk transfer (ART) solutions and what they offer. As the 16th annual Excellence report points out, there is a compelling relationship between understanding what alternative risk finance solutions can do and effective data and analytics. By leveraging data and grasping new risk finance opportunities, risk executives have an opening to become ART educators, adding value to the strategic decisions that affect their company’s balance sheet.