Risk professionals believes that forecasting risk will not get any easier in the next three years, with cyber risk and regulation topping the list of likely emerging risks, according to a new Marsh report.
The Excellence in Risk Management report, which was produced in conjunction with RIMS, found that while risk professionals are increasing relied upon to identify and assess emerging risks, there remain organisational and other barriers preventing this.
According to the report, 61 percent of survey respondents cited cyber attacks as the likely source of their next critical risk.
This was followed by regulation at 58 percent and talent availability at 40 percent.
Brian Elowe, client executive leader of US Marsh and co-author of the report, commented: “Whether emerging risks are on your doorstep, around the corner, or on the far horizon, they have the potential to catch organisations unaware.”
“It’s important for risk professionals to maintain awareness of global risk trends, and to make the connection to their organisations’ business strategy.”
A majority of respondents, 60 percent, said they use claims-based reviews as the primary means to assess emerging risks, compared to 38 percent who said they use predictive analytics.
Elowe added: “The widespread use of claims-based reviews means that a majority of organisations are relying on studying past incidents to predict how emerging risks will behave rather than using predictive analytic techniques like stochastic modelling and game theory to help inform their decision making.”
Respondents also cited several barriers to understand the impact of emerging risks on their business strategy and decisions, with lack of cross-organsation collaboration ranking first among risk professional respondents.
Carol Fox, vice president of strategic initiatives for RIMS and co-author of the report, said: “Lack of collaboration across the organisation is still an issue for many risk professionals. On the other hand, breaking down silos has become less of a concern for executives.”
