“Firms must confront the resulting risk challenges to successfully adapt to this exciting new environment”
Risk management is one of the most “pressing areas of challenge for industry leaders”, financial services provider State Street has said.
The firm was responding to results of a survey which revealed that more than one-quarter of insurance companies across the globe are experiencing difficulties in managing risk.
Improving the assessment and pricing of risk presents a major challenge in particular, with 93% of respondents based in the Americas viewing this as a hurdle, while 89% of insurance executives in Asia Pacific and 88% in Europe, the Middle East and Africa (EMEA) finding this difficult.
The survey, commissioned by State Street and conducted by the Economist Intelligence Unit, quizzed more than 300 insurance executives from life insurance companies, casualty firms and diversified insurers.
It also indicates that one-quarter of EMEA respondents had difficulty in hiring knowledgeable, qualified risk management staff – which was considerably higher than the16% cited from respondents in the Americas.
State Street executive vice president and international chief risk officer David Suetens said: “The changing environment in the insurance industry is transformational: enhanced product design, changes in the distribution channels, regulatory demands and their investment practices. Consequently, the EIU survey highlights risk management as one of the most pressing areas of challenge for industry leaders. This new landscape places a laser focus on risk. When adjusting their business models, firms must confront the resulting risk challenges to successfully adapt to this exciting new environment.”