Page 16 - The Insurance Times February 2025

Risk Function

A Comparison of

European and

Indian Insurance

"Risk Function"

Sonjai Kumar Dr Purnima Rao
PhD in Risk Management Associate Professor,
Certified Fellow of the Fortune Institute of
Institute of Risk International Business,
Management, London New Delhi, India

The subsequent discussion compares the key areas within the risk management function of
insurance companies in Europe and India. These are the existence of skilled resources, issues
related to data, whether the risk function is challenging the first line enough, whether the risk-
based decision-making is working well......

Background the existence of CRO's veto power. Since these are the com-
mon areas we found covered in this article, for our PhD
This article was inspired by McKinsey's report, "Elevating the
research, we have covered the entire COSO framework to
risk function in insurance: Building a strategic advantage,"
understand the ERM practices within the Indian insurance
published in November 2024. The article discussed the
industry.
benchmarking survey they conducted during 2023-24. Some
of the results discussed in this report are very similar to our
results about the Indian risk function in the insurance sec- Comparison
tor. Our survey was conducted during 2022-23 for PhD re- Skilled Resources
search. This is the first such research conducted in the In- McKinsey's report highlights talent scarcity, both in attract-
dian insurance market. My thoughts are in two ways: one ing and retaining talent. The report stated that companies
is to highlight similarities in issues found, and the second is have difficulty finding talent for data and technology roles,
that despite the earlier enterprise risk management (ERM) cyber risk, and nonlife underwriting.
development in Europe, the challenges are similar, where
ERM in the Indian insurance market is yet to mature.

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Europe and India. These are the existence of skilled re- ® ·­ µ ­ å ¸ ± ©»ª »®ô ­ ± ³ » º± ½ « ­ ± ² ¬¸ » ¬± °
sources, issues related to data, whether the risk function is
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decision-making is working well, how the relationship of the ·¼»² ¬·º§ ·² ¹ ¬± ± ³ ¿² § ® ·­ µ ­ ·­ ´± ­ ·² ¹
Chief Risk Officer (CRO) with other stakeholders, how CRO º± ½ « ­ ± ² µ »§ ® ·­ µ ­ ò
is communicating the risk results in key stakeholders, and

The Insurance Times February 2025 15