2021 in Closing – Learnings From a New MetricStreamerRisk Management | 3 Min Read |21 December 21|by Victoria Boreham
With almost 3 months into my new role and with the continuously changing landscape of the COVID-19 pandemic, it seemed timely to reflect on 2021.
If you’re in the UK like myself, regular updates on current pandemic statistics, emerging variant information, and pre-emptive warnings of new restrictions are now part of the new normal. We’re shown data and graphs. This leads to series of questions on how the ‘risk’ is being measured and controlled. Do we need to work from home? Do we need to cancel social activities? Do we need to increase compliance around face masks? Is the control working? Do we need to reassess the current control? Is there sufficient data to warrant a review of the control?
Does this sound familiar? These are all questions that risk managers ask themselves on a regular basis. It’s also important to understand that ‘risk’ is a language that presents itself across industries and in many different forms. Whether you’re trying to avoid insuring properties at risk due to climate change, choosing not to travel due to pandemic restrictions, or taking available vaccines and boosters to minimize potential impact of the coronavirus.
My 3 key takeaways for 2021:
- The landscape of risk will continue to evolve, and the focus will also shift – we’ve seen that. New requirements around environmental, social, and corporate governance are now part of the new reality. We will continue to see this evolve and companies will be held accountable for their responsible business practices. We’ve already started to see this with Lloyd’s market stating they will end new investments in coal, oil sands, and Arctic energy by 2022. At the start of this year analysts at Societe Generale SA also published a report which outlined how an insurers position on coal underwriting and investments can influence the valuation of a company in figures ranging from -3% to +9%.
- Data is central to all of this, but sometimes it sits in multiple places. Various disparate systems that don’t talk to each-other make it difficult to form one view of risk that cuts across different business units. It also makes reporting a nightmare when you bring out our much-loved spreadsheets and try to convert different formats into the same lingo. Products available on a single platform that are interconnected can do the heavy lifting enabling you to focus on optimization instead of data management and tracking.
- Agility is important and real-time analytics are central to understanding your risk. These insights support the risk trade-offs and identify opportunities that the board can evaluate. Organizations need to embrace agility and use data and technology assets to continue to evolve with the risk landscape, so they aren’t left behind.
While the pandemic has been a huge focal point in the past few years, I’m of the opinion that new risks will continue to emerge and change the landscape. This is why we must focus on getting ‘our house in order’ by using the data and analytics we have to assess our risk. To not make decisions by chance but by ensuring these are founded on quality data and insights.
Something we talk about here at MetricStream is transforming risk into a strategic advantage. In essence, it’s a journey on how you can move from tracking risk to managing risk and eventually thriving on risk. You can only thrive on risk once you have your data, analytics, and risk appetite in alignment and the strategy around this defined. It is something that we should aspire to do—to go from managing risk to thriving on risk.
You can read more about the journey and how we help our customers here. I hope it’s something we can all do more of in 2022.