In 2022-2023, all the global industries were made to respond and adapt to the growing list of arising disasters and risks. This past year, steps have been taken to intensify the adoption of the latest technology, adopt innovation by extending the talent pool, and data-driven and risk management strategies. In 2024, the risk landscape is expected to change quicker than most companies can manage, leaving risk managers and executives struggling with the following question: “How can I prepare my company to be more resilient?”

Having an awareness of the trends of risk management has been critical for companies to prepare themselves for anything that might come their way. In this article, I have compiled the information from the combination of the resources, highlighting the five increasingly suitable trends that risk professionals and executives must follow in 2024 to get ready for emerging risks, make strategic decisions and anticipate unplanned costs.

Trends Of Risk Management

  • Cyber Security
  • Supply Chain Management
  • Shortage of labor and employee turnover
  • Shifting risk profiles

Cyber Security

It is a famous risk conversation. Risk management leaders have noticed this. Digital business processes used in the cloud and hybrid work have been introducing new risks widely, increasing the assertive threat surroundings. Deeply embedded vulnerabilities and ransomware attacks on a digital supply chain expose skill shortages and technology gaps.

Below, you find the ways to become resilient through the change in environment:

  • Push the cyber security decision by bringing out all the aspects of the business.
  • Reframe and evolve the security practice to better manage the cyber risk.
  • Reevaluate the stack of security technology so that you can address new threats.

Supply Chain Management

The growth of the organization has been transitioned from 6-7% in 2021, to 3.7% in 2022, to 2.2% by the end of 2023, expected to decrease further in 2024. Factors that will weigh in are:

  • Inflation, recession
  • Supply shortages
  • Demand downturn
  • Weather disruption

Insurance is one of many choices when managing the supply chain risk. While analyzing the risk control options, business leaders must assess online cloud-based technologies or applications that will link the supply chain partners with leverage data insights for analyzing the potential vulnerabilities.

Bob Rogers, the CEO of Oii.ai said that people don’t realize that most of the supply chains have been configured manually. This means that there is the human adjustment of parameters when there is an interruption every time. But it’s a tedious task and people are too inefficient to do it successfully on a broad scale. A reliable Risk and Claims Management System should be the borderline that you must include in today’s risk environment. 

Shortage of labor and employee turnover

An extreme labor shortage is affecting almost every industry as a result of “baby boomers” retiring earlier and changing expectations about work as a result of COVID-19’s effects. Employee turnover is also a major concern to organizations.

Among industries, the percentage of people actively looking for work is lowest (14% to 15%) in education, real estate, health care, and government, and highest (25% to 36%) in technology, financial services, telecommunications, and oil and gas. Thus, there is a higher likelihood of employees “jumping ship.”  The “pull” that other companies have on your employees is something that is sometimes ignored. Examine your recruiting data and KPIs as well to understand the hiring practices of your competitors. 2024 is the year to make investments in staff retention. Take into account putting these ideas into practice:

  • salary increase in response to rising inflation
  • more training and well-defined development pathways
  • hybrid settings for work
  • additional benefits for employees

Shifting Risk Profiles

Corporate risk managers have been adjusting risk profiles to cut expenses due to economic disruption. As a result, businesses take on greater internal risk and are often left underinsured or uninsured. In reaction to these developments, insurance firms can become more picky, underscoring the significance of businesses communicating any changes to their operations. Increased transparency between your broker and insurance company can assist in guaranteeing the proper coverage and prevent you from overpaying for the risks associated with your business.

Assessments of properties also affect risk profiles. Experts at Liberty Mutual believe that 75% of global commercial enterprises are undervalued. several factors, such as building costs, the intensity and frequency of weather events, and business disruption.

Conclusion

In 2024, the global risk environment will be changing quickly. The first step in figuring out what your company needs to be ready for is being aware of trends. We may assume that these trends will retain a lasting effect on the way businesses operate, even though it’s not possible to forecast how long they will last. Businesses need to concentrate on operational stability to protect themselves against threats, which might include supply chain interruptions, personnel instability, cyber-attacks, or shifting threats. 

The use of more data-driven and sophisticated risk management technologies for giving exposure to exposures and risks is a significant development. In 2024, information will be crucial for interacting with board members, investors, insurers, and other corporate stakeholders.

Daily hazards are impacting businesses, but those with knowledge are better equipped to navigate these challenges. To stay ahead, companies must continuously assess and adapt their continuity strategies to address the most pressing risks. Staying ahead of risk requires continuous learning. Subscribe to ShriLearnig blog for more insights on navigating the evolving risk landscape in 2024.