As businesses expand geographically and operate in more new and often unfamiliar countries, risk managers face a complex web of rules and regulations as they seek solutions to a range of emerging risks. And they must establish effective global insurance programs that deliver strategic value while reassuring their boards that their coverage will respond where and when it’s needed.
“Risk managers are expected to play a more strategic role in their organizations,” David Bidmead, global leader of Marsh Multinational Client service, said during Marsh’s November 18 The New Reality of Risk® webcast. “They’re consistently expected to help organizations see the ‘bigger picture’ when it comes to risk.”
To see that bigger picture, risk professionals should work closely with others across their organizations. Risk managers should have a clear vision “on how multinational insurance needs will be met, and ensure buy-in from all stakeholders, including senior finance management, ERM leaders, and legal counsel,” said Stacey Regan, deputy treasurer at GE.
Among the key takeaways from the event:
- Multinational risk professionals need to play a bigger role in their organizations’ cyber risk management program, rather than relegating cyber to IT departments that focus on prevention rather than response planning. “Organizations need to perform comprehensive assessments that define what assets are at stake,” said Matt McCabe, a senior advisory specialist in Marsh’s Cyber Practice. ”They need to define a strategy of how to prevent cyber compromise of those assets, and then they need to plan for when prevention fails.”
- As organizations look to grow through mergers, acquisitions, and other transactions, risk professionals must ensure they are included in core deal teams from the beginning. “Starting early will give you time to perform a proper risk and insurance due diligence process, so you can identify critical deal risks, including local regulatory compliance,” said Scott Brady, a senior vice president in Marsh's Private Equity and M&A Services Practice. “And it will give you the time to properly mitigate those risks, whether through insurance or other means.”
- Risk managers need to understand all of the factors that could affect their global insurance programs, including regulatory and tax considerations. “With greater access to data and analytics, risk purchasers will have the ability to discern trends in local policy purchasing, benchmark their approach against peers, and run worst case scenario analyses,” said Christian Hunter, practice leader for the Americas in Marsh's Global Insurance Regulatory and Tax Consulting Practice. “Such intelligence can equip the risk manager to make better decisions and justify the risk management approach.”
The panel also discussed solutions leading companies like GE are employing to manage a growing array of risks.