The proliferation and standardization of new regulations force risk managers to review the way risk is managed as well as re-evaluate the value risk management is bringing to the the organization.

Their function has changed from a reactive control function to an advisory function.

The new function of the risk manager becomes therefore more and more central for the organization as it plays a strategic role in:

• Advising the business
• Closely interacting with the customers
• Participating in strategic discussions, business planning, capital allocation and defining risk appetite.

One of the main duties of risk managers is to raise awareness on changing landscapes, combining value from the use of market data, as well as regulatory rules.

"The key is to use the data and regulatory requirements to not only assess the risks, but also to identify opportunities, and this in a timely manner"

Risk Managers should therefore work, hand in hand, together with their commercial counterparts, to continuously adapt the business model in a way that best captures the risks arising from all possible interactions with the outside world, but also from within, looking at topics such as compliance, audit, finance, marketing and sales.

Risk managers should mobilize and encourage all major actors of the organization in order to tackle the most strategic risks faced by the company.

“Risk Managers have a central and transversal role outside and inside the organization.”

They should:

• Actively manage stakeholders (regulators, investors, local legal entities,…)
• Elaborate an established plan to capture and control risks
• Communicate about risk processes
• Train people across the firm in their perception of dealing with risk
• Ensure that good practices are understood and shared by everybody
• Facilitate the definition and implementation of Key Risk Indicators and follow-up them regularly

Consumers behavior is increasingly direct through the use of various digital channels.

“The challenge is then to balance Risk Management while empowering customer needs in the new digital environment”

Risk managers should therefore help their business in adapting to customer needs by contributing to

• The redefinition the communication model with consumers through new technologies, apps, social media…
• The proposal of very personalized products and pricing
• Capturing the multiplicity of segments

This Digital Transformation of the business can be facilitated with the innovation brought by #FinTech and #InsurTech.

Today, risk-based pricing is mainly driven by regulatory or actuarial models and the price given by the market.

In this competitive world, companies can make a difference by focusing deeper on the customer behavior and adapting their pricing approach accordingly.

“A shift should happen from a technical, actuarial based pricing to a value-based pricing based on specific customer needs and behaviors.”

In order to do so, a shift from looking purely at past behavior to incorporating present behavior is crucial.

By leveraging on Big Data in the digital world, companies can create new products based on specific & immediate needs, and price accordingly. This will help customers in understanding the perceived value of the proposition.

The fast-growing technology world and the increase of data force Risk managers to embrace innovation and review their risk management processes.

By implementing innovative solutions (ie. Machine learning techniques, Big Data for Risk, lean development), Risk managers can:

• Make use of unstructured data to measure better the risk and to predict the future
• Take real-time risk decisions
• Implement efficient pre-litigation and litigation strategies
• Implement fast-track settlement processes

Risk managers should bring together and make the most of people, processes, information and technology, to assess the risk.

The market is pushing for responsiveness to changes , which implies an inevitable shortening of the risk decision processes.

“ Improving the data quality, setting-up a proper data governance framework and standardizing the operational processes can optimize the overall performance of the risk decisioning activities and ensure the reporting and aggregation of accurate data.”

To make better & faster decisions, Risk Managers should help in creating a strong and knowledgeable organization, with a comprehensive risk management framework.

High pressure on profitability and ROI of digital, technological and regulatory initiatives is one of the main concerns of Risk Managers.

“Business performance being measured on a risk/reward trade-offs, Risk Managers have to work closely with the marketing, IT, actuarial and finance department.”

With their expertise, they will help to optimize the cost and balance sheet by collaborating with strategy and finance functions taking into account different strategic choices.