Page 36 - Insurance Times May 2022

1) Role of Risk Management Professionals (c) Competitive Risk
in Strategic risk management. This risk is referred to as competition in the local industry of
emerging economies. Risk management professionals can
(a) Political Risk respond to this risk by including competitor SWOT analysis
Political risk is related to change in the ruling government and customer requirements through surveys and research.
in which emerging market operates. There is no technique Along with a business consultant, these professionals will
to predict unstable regimes from the political level. From then analyze the competitive strategies adopted to gain a
the professional risk point of view for emerging economies, significant market share. For such purpose, investments
the only response is to remain compliant with laws and need, and advancement in product quality will play a
regulations, to abide by the statutory requirements and prominent role in responding to competitive risk aversions.
adapt to the government policies. A risk management
professional remains vigilant while monitoring the changes 2) Role of Risk Management Professionals
in local governments’ priorities and ensures alignment of
organizational activities accordingly (Clarke and Varma, in Operational risk management
1999). For such purpose, these professionals remain in active (a) Pricing Risk
relationships with government departments and political Pricing risk refers to identifying the correct and acceptable
parties and stay connected to gain first hand knowledge of price of a product that customers accept to purchase the
changes in government statutory requirements. Additionally, product. Risk Management professional suggests that pricing
organizations opt to become members of business and trade risk can be managed through a cost-effective approach at
associations to raise voice and concern via public voice to raw material purchases, the economics of scales, and logistic
ruling governments. Political mastery can become a source expenditures in emerging economies. Purchase departments
of competitive advantage and a means of avoiding losses. negotiate at the best available price in the market. Risk
professionals suggest that market analysis will maintain the
(b) Local Market /Industry Risk benchmarking cost for raw material items. Along with
This risk is related to volatility and uncertainty in the market business professionals, they can respond to these risks by
and industry condition of emerging economies in which working closely with customers to supply the best value-
organizations operate. Risk management professionals' most added products that satisfy their needs.
critical response to these risks is the methodical and
continuous testing of market circumstances. Risk (b) Workforce Risk
Management professionals remain connected with the local Emerging economies are facing a shortage of skilled
market participant to gain knowledge of the local market workforce. This shortage may comprise technical as well as
culture. These professionals then raise the requirements to manual labours. To face this risk, risk management
invest in technologies and upgrading organizational professional's advice to adopt human resources strategies
machinery to reduce costs. Such a response in the shape of to overcome the supply of labor force. Such strategies may
the introduction of new brands and the acquisition of new be consisting of providing training and educations programs
companies or products can respond to local market and to improve the technical skill of labourers. Offering
industry risk by risk management professionals effectively. competitive market remuneration to a deserving candidate
can overcome this work force risk. Overall, labourers can
be handled via labour unions or through HR consultants.
Further, technical staff assistance can be obtained from
other countries or via remote working strategies in case of
local shortage.

(c) Security Risk
The security risk is referred to as the law and order situation
in rising economies. This includes security and safety of
physical properties, goods, human resources, and
organizational assets, either tangible or intangible. From the
risk management perspective, professionals review security
as significant threats to destabilize the economy (Cornalba

36 The Insurance Times, May 2022