Regulatory compliance and operational concerns are the main risk areas for corporate India, says a research by ICICI Lombard General Insurance. The research elucidates Enterprise Risk Management (ERM) as a mechanism that combines culture, capabilities and practices with strategy setting and its execution to manage risks in order to create, persevere and realise value.
“While the key risk areas perceived by India Inc include regulatory compliance (53 per cent) and operational concerns (50 per cent); 27 per cent of the respondents believe geopolitical uncertainty to be a risk factor,” said the study, adding that 23 per cent claim uncertain economic growth can lead to increasing risks. The research was conducted through online interviews with 130 C-suite risk officers to identify the risk practices adopted by Indian organization’s, the insurer said in a release.
“Interestingly, only 23 per cent respondents perceived information insecurity as a key risk, while 11 per cent believe technological disruption was a risk area,” it said, adding that this could be because of the limited risk exposures that companies would have experienced directly. The report states that 88 per cent organization’s claimed that supporting strategic business decisions has been one of the key drivers for ERM implementation.
It also states that 73 per cent of organization’s have been equipped with risk governance framework for more than three years, whereas 20 per cent have incorporated a risk governance mechanism in the last three years and only 7 per cent have introduced the same in the last year.
“With the emerging global uncertainties coupled with technological disruption, it is need of the hour for organization’s to equip themselves with a well-defined enterprise risk management framework,” said Bhargav Dasgupta, MD and CEO, ICICI Lombard General Insurance.
Risk management is not limited to identifying the risk elements or risk indicators, but aligning them strategically with business decisions to maximise the security of the firm, he added.
Source- Business Standard
Date- 23rd January 2018