Financial volatility ranks as top emerging risk in actuarial study.

• Author: Ladd, Scott
• Position: RISK MANAGEMENT - Report

Strategic risk management is finally getting the full attention of the corporate C-suite, as the risks to global enterprises deepen and the responsibility of the risk manager grows accordingly.

In its fifth annual survey of emerging risks, the Joint Risk Management Section of the Society of Actuaries, Casualty Actuarial Society 41 and Canadian Institute of Actuaries found that 84 percent of risk managers have C-level input and are able to exert influence over strategic business opportunities; just 7 percent report having no input. The study's authors regard that as a solid indicator of risk management's increasing importance in strategic discussions.

Financial volatility was cited as the top emerging risk, with 68 percent of the respondents describing it as one of their top five concerns. Failed--and failing--states were named on the lists of 42 percent of those interviewed, while 38 percent identified cybersecurity or threats to the interconnectedness of infrastructure. Also cited by 32 percent as one of their major concerns is potential economic hardship in China, potential oil price shocks or regional stability.

Categorically, economic risks were of highest concern, at 56 percent, outpacing geopolitical, technological, societal and environmental issues. Max Rudolph, CEO of Rudolph Financial Consulting LLC--which conducted the survey for the actuarial groups--says new geopolitical events have shaped the thinking of risk managers since the last survey, in 2010.

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"While the Japanese devastations and the Arab Spring were the two events with the largest worldwide implications, other events included the European sovereign debt crisis and the largest...