How do you adapt risk management to shifting business environments?
How do you adapt risk management to shifting business environments? | Insurance Business Australia
Professionals Risks
How do you adapt risk management to shifting business environments?
Revealed – factors influencing nature of risk management
Professionals Risks
By
Roxanne Libatique
Gallagher has published a report, “Building the Optimal Risk Management Function in an Unpredictable Operating Environment: Perspectives of a Risk Manager,” scrutinising the complex and shifting priorities in business environments.
This analysis revealed how closer scrutiny of both internal and external risks enable businesses across various sectors and sizes to better navigate intricate market conditions.
The report outlined several insights, including the effect of the pandemic on risk perception, potential inadequacies in current risk strategies, and the advantages of an expansive and integrated risk management approach. The importance of a strategically focused and well-supported risk management framework, staffed with competent professionals, was also highlighted.
The report advocates for flexible operating models that can adapt to the evolving risk landscape and align with organisational goals.
Factors changing the nature of risk management
The publication further discussed how the nature of risk management is being transformed by challenges such as resource limitations, increasing product complexity, and a deeper understanding of business operations. In response, organisations are either bolstering their in-house capabilities or opting for hybrid models that utilise both internal and external expertise.
Benefits of sophisticated risk management
Gallagher’s report stressed the critical role that sophisticated risk management plays in protecting assets, ensuring compliance, and promoting corporate governance.
By implementing comprehensive and flexible risk management strategies, companies can safeguard and potentially enhance their long-term growth and resilience amid persistent global challenges.
“Businesses should ideally be looking more closely at their risk profile at this time and how it helps their business move forward. While some of us view risk in a negative light, there is the flip side where risk enables opportunity and growth,” said Neil Hodgson, managing director, risk management consultancy at Gallagher. “Considering the range of risks that exist in your business helps to identify something that could go wrong gives you the ability to put it right before it causes a problem. That’s an opportunity to do something better. Ultimately, it’s important to view each risk in context. It’s often easy to overlook that aspect.”
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