Risk culture still lacking in Asia – EY

February 22 2018 by InsuranceAsia News Staff

Less than half of insurers across the region have developed a risk culture or risk conduct framework, according to a new Asia-Pacific survey of insurance chief risk officers (CROs) by EY.

The survey of CROs from across Australia, Greater China and Southeast Asia found that while risk frameworks have already been widely adopted in the banking sector, they remain relatively new to the insurance industry, with only 45% of insurers across Asia Pacific having implemented them.

Most of the differences between markets across the region are due to different regulatory expectations and approaches to conduct risk.

“When it comes to implementing risk culture frameworks, Australian CROs are leading the way, while those in other Asian markets, such as China and Singapore, will need to focus on this over the coming 12 months,” said Jonathan Zhao, EY Asia-Pacific insurance leader. “It’s also fair to say that larger firms operating in the region, with headquarters in the US or Europe where regulators have set high-conduct risk management benchmarks, tend to have more advanced practices.”

In addition to addressing transformation in their own functions, the insurance CRO’s role is shifting from traditional risk and regulatory compliance to becoming a partner within the business, with greater influence over the company’s strategic direction.

More than 70% of respondents said that their attention was split 70:30 between business and regulatory issues. Most have also increased their influence over or secured approval of key processes.