Organizations that develop both resilient and agile business practices will see greater flexibility and success over time, according to a new study from PricewaterhouseCoopers (PwC).
“Companies today that leverage risk management as both an offensive and defensive tactic are leading the way in maintaining long-term success,” said Dean Simone, leader of PwC’s U.S. Risk Assurance practice. “Finding that right median will come differently to companies and industries across the board, but the key is to strike a balance that allows for growth at a comfortable pace, relevant to the risk appetite and tolerance levels set by management and accepted by the board.”
PwC’s Risk in Review noted that risk agility – the ability to nimbly shift risk management strategies in response to market changes or customer preferences – allows organizations to take advantage of opportunities more readily than their counterparts with rigid risk infrastructure. Risk resiliency helps withstand business disruptions, according to the report. Varying levels of the two have different impacts on performance, PwC found, and chief risk officers and chief compliance officers are in the best position to promote both in their organizations.
“Our analysis shows that risk-agile companies are far more likely to say they expect significant revenue and profit-margin growth than those that are not risk agile,” PwC said. “But agility alone takes you only so far.
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Erin is the managing editor of Advisen’s Front Page News. She has been covering property-casualty insurance since 2000. Previously, Erin served as editor-in-chief of The Standard, New England’s Insurance Weekly. Erin is based in Boston, Mass. Contact Erin at [email protected].
