Large scale cyber attacks, massive incidents of data fraud or theft, and extreme weather events are the top three risks for India Inc, according to a joint survey by Marsh and RIMS, the risk management society.
The report, Marsh RIMS Excellence in Risk Management – State of Risk Management in India, was launched at the RIMS Risk Forum 2018 India.
Some 88% of the survey respondents – representatives of C-suites, executives, and risk professionals across 19 industries – identified cyber attacks as the top risk in India. This is followed by data fraud or data theft (85%). The country’s growing dependencies on data and digitisation efforts have increased the risk of cyber attacks. Cyber risk management also emerged as a key focus area for risk executives with 70% of respondents expecting an increase in investment, which is aligned to cyberattacks being chosen as the top critical risk.
The third biggest risk is extreme weather events (84%). According to a report by Lloyd’s, India has one of the largest insurance gaps globally for natural catastrophes with a penetration rate of less than 1%, highlighting the vulnerability businesses face when extreme weather events occur.
The remaining risks making up the top 10 are severe energy price shock (81%) and failure of a major financial mechanism or institution (81%), fiscal crises in key economies (80%), water crises (76%), shortfall of critical infrastructure (76%), failure of urban planning (72%) and failure of national governance (72%).
The interconnected dynamics of geopolitics, technological advances, global economic integration, social instability and climate change mean that the manifestation of one risk is increasingly likely to influence others.
Interconnectivity and interaction of existing and emerging risks is creating newer, unique and unpredictable risks making it even more difficult for organisations to identify risks. Most risk professionals, C-suite executives, and finance professionals generally agree that forecasting critical business risks is more difficult today than before and will not get easier in the next three years.
Hence, upgrading risk assessment technology, access to information and improving use of data and analytics should be priorities for organisations in India given the rapidly changing risk landscape. It is highly crucial for organisations to ensure that risk management integrates with their strategy and values and set it in stone by implementing risk management processes within the day-to-day business, said the report.
The survey was conducted in September 2018 and is based on over 120 responses to an online survey by C-suites, executives, and risk professionals from leading firms across 19 industries. A