I don’t know about you, but I get a little jazzed every time I see an article on the gradual ascendency of risk management in business and politics. Whether it is the prescience of the insurance industry in talking about climate change in terms of impacts to businesses and society as a whole, or the growing number of chief risk officers (CRO’s) in the C-suites of major corporations, there seems to be a broader understanding of the power of risk management in our lives.
A study I came across published by BNY Mellon stated that over 80 percent of institutional investors expect risk management to play an even greater role in the investment decision process in the future. Over the next five years, 73 percent expect to spend more time on investment risk issues, while 68 percent expect to spend more time on operational risk issues. Only 25 percent of respondents, however, had a chief risk officer. Now I know this is just one slice of the pie, but I think it is telling that the study finds that, in the wake of the 2008 financial crises, risk management has now become a key priority of almost all institutional investors – those of yore who probably more identified with the Wolf of Wall Street! Maybe it is just a temporary cultural shift in the aftermath of the crisis – but I think the rise of risk management is here to stay. Not only does it bode well for the captive industry, but as we all know it is good for society.
Have a great weekend and, as always, please let me know of any issues or news affecting our great industry, or any ideas you might have to better serve you. Thank you and I look forward to hearing from you!