The Risk Outlook: Key Takeaways from RIMS RISKWORLD 2023
It’s not an exaggeration to say that April 30 to May 3 were four of the most important days on the calendar in the world of risk and resilience. This year’s RISKWORLD conference in Atlanta, Georgia, featured more than 10,000 attendees from 70-plus countries, 400 exhibitors, and 300 speakers.
Focusing on the latest trends, BDO leaders were at the heart of it all, gathering key insights and driving conversations about risk and resilience.
Several key themes emerged during the conference:
Technology Platforms Are Taking Center Stage
Risk Management Information Systems (RMIS) and Insurtech were buzzing topics on the conference floor. While these platforms are powerful tools that enable organizations to assess information more efficiently, they only work when set up correctly. Failure to properly set up use cases, data architecture, and rules within a chosen platform will ultimately lead to frustration and not deliver the desired business outcome.
At the same time, implementing new technology effectively can bring organizations greater efficiency in the form of automating manual processes, gathering data insights through AI, and enabling systems to talk to each other. What’s more, the cost of research and development for new tech may be partially offset by available tax credits.
ERM Is Back in the Risk Manager’s Corner
Risks from Cyber and ESG are the driving force behind ERM at the moment. They require new frameworks to be put in place to address the challenges they present to organizations, and the hard insurance market is making executives begin to understand that coverage needs to be purchased thoughtfully and not as an item on a checklist.
ESG Litigation Is an Area of Concern for Financial Institutions
The Annual Litigation Trends Survey by Norton Rose Fulbright found that despite environmental, social, and governance (ESG) litigation hovering at a low level in 2022, respondents expect there to be an increase in the coming year. This includes additional regulatory oversight, such as new rules proposed by the SEC.
This is also particularly relevant to the area of “greenwashing,” the act of an organization making claims about beneficial climate- or environmental-related action when, in reality, it has done little to none of the work it stated. According to a recent Wall Street Journal article, 60% of interviewed global executives believe their organizations are overstating sustainability claims, potentially exposing them to new government enforcement.
Alternative Risk Vehicles Are Evolving
Trends in insurance are shifting. Historically, alternative risk structures were viewed as a tax strategy for large organizations to reduce costs, but economic conditions have changed that. Organizations with self-insured entities more than five years old will find that its original use case has likely changed. Companies are now in a phase of reevaluating how to structure insurance programs in the current marketplace and the role they play.
Cyber Is Still in the Spotlight
Cyber risk continues to be a major industry focus, particularly in areas of mitigating threats and how to navigate the cyber claim process. That includes concerns about the adjustment process becoming stricter, more challenging, and more drawn out. Organizations need to stop talking about insurance and start zeroing in on operational resilience. Read BDO’s insight here.
Workers’ Compensation Costs Are Rising
The cost of workers’ compensation claims has continued to rise. As an aging workforce and inflationary pressures continue to create challenges, organizations are struggling to find solutions to improve the way they manage the cost of their workers’ compensation programs. Focusing on data accuracy, automating internal processes, and even evaluating outsourcing options to third-party administrators are just a few of the ways organizations can adapt. BDO Director Jake Acosta and TrueBlue Vice President of Risk Management Brent Pickens presented industry-leading practice ideas at RISKWORLD that continue to challenge the status quo. Organizations must be cognizant of the changing environment regarding workers’ compensation and recognize that allowing claims to linger may result in negative consequences.
Learn More About BDO’s Insurance, Risk & Recovery Services
BDO’s Insurance, Risk & Recovery helps organizations protect themselves and recover from complex, unpredictable events. By taking a holistic approach to operational resilience, BDO provides clients with the full picture of their risk profile to assist them in areas of insurance, operational resilience, and claims recovery.
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