The 16th Annual RIMS Marsh Excellence in Risk Management Report explores Strategic Risk Finance in an Era of Big Data.

Risk management executives today operate in a time of abundance in two key areas: capital
and data. Pension funds, sovereign wealth funds, and others have earmarked an estimated
$1 trillion for investment in risk finance. And on the data side, too, the numbers are
staggering: Some 2.5 quintillion bytes are created every day (and that’s a year-old figure!)
By next year, 1.7 megabytes of data will be produced every second for each of the Earth’s
8 billion people.
So what’s the connection? By effectively marshalling data and risk modeling tools,
organizations can better understand changes in their risk profiles and their risk bearing
capacity, allowing them to access the opportunities presented by the growing levels of
capital available to finance risk. The reward for those that get it right is to build a robust risk
finance strategy and more resilient organization.
But making effective use of risk data remains a stumbling block for many companies. In
fact, the 2019 Excellence in Risk Management survey found that organizations’ top priority
for improving risk management capabilities is to improve their use of risk data and
analytics. Again.
This has been the top priority each time we’ve asked the question since we first started
doing so in 2013. Why isn’t the needle moving? Are companies stuck in a “this-is-the-waywe’ve-
always-done-it” mentality? Is data gathering taking precedence over data use?
Are changes in analytics happening too fast? Do companies not recognize the potential
benefits of a well-planned data and analytics strategy? Or are they simply unable to manage
the wealth of information?
At the same time, many respondents were unfamiliar with alternative risk transfer (ART)
solutions and what they offer. As the 16th annual Excellence report points out, there is a
compelling relationship between understanding what alternative risk finance solutions
can do and effective data and analytics. By leveraging data and grasping new risk finance
opportunities, risk executives have an opening to be ART educators, and add value to the
strategic decisions that affect their company’s balance sheet.
Also in this year’s report, we look at how technology has created a new data-driven
approach. “Real-time” risk management holds the promise of more effective risk
modification and better informed risk finance decisions.
We hope you find this report a useful tool to stimulate discussion in your organization
and with your peers. And we encourage you to reach out to us with your questions
and comments.

Find the full report—april-2019

Scroll to Top