The role of the insurance CRO is changing at a fundamental level and is increasingly expanding beyond risk to include product design, model validation, performance analysis, and financial reporting. With broadening strategies and increasing insurance risk appetite, firms will also have to enhance their quantitative models and overarching approaches. It will be the responsibility of the CRO’s office to provide a vital link between financial, actuarial, and operational risk and the business’ overarching strategy.
The primary sector-specific dynamics can be bucketed as:
Digitalization, data, and modeling: Ongoing digitalization in insurance is opening up new capabilities and opportunities
Modeling and analytics: The actuarial function has had to evolve to accommodate a much more diverse range of analytical frameworks
Externalization of the risk function: Externalization of the risk function is strongest among reinsurance firms and insurance brokers