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Editorial: Risk management times are a’changin’

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Risk management is an evolving discipline and, as is the nature of the evolutionary process, changes keep on coming.

But, as we report in our cover story and in our special report, the rate of change in the risk management sector is accelerating.

A fundamental change to a business model, such as the move from traditional retail stores to online commerce, brings with it a new risk profile and a need for different risk management skills. Expertise in how to manage slip-and-fall risks for customers, for example, will remain important but maybe not as important as managing workplace safety in the warehouse or workers compensation risks.

And as the business evolves even further and automation takes on an even bigger role, cyber risks, engineering risks and business interruption exposures will overshadow all the people risks.

Of course, it’s not just retailers that are dealing with changes in business models and processes. One of the biggest and most talked-about changes is the rise in big data and how access to immense amounts of digitized information can open the door to a level of analysis and modeling that was previously unheard of in insurance and risk management.

Having access to the data is one thing, but making sense of it is quite another. In addition, questions are bound to arise on who owns the data. When client data sits in a company’s system, does it belong to them or their clients? And who has the right to sell it or use it? These and no doubt numerous other issues will develop as more entities recognize the power of big data and the money that can be made from its manipulation.

The good news for the risk management sector is that risk management schools appear to be recognizing that the game is changing and are striving to ensure their students enter the workplace with a better understanding of holistic risk management.

For those already established in their careers, however, the challenge is how to keep pace as risk management mutates. The creation of best practices by risk management experts and the ability to share learning experiences within the risk management community will take on a new importance, and it’s up to everyone in the risk management sector to make sure that such practices survive and thrive.