Investment firms must ensure a stronger alignment between risk management and insurance coverage as they face the challenges of digital transformation in 2025, according to WTW.
To achieve this, firms must undertake a comprehensive process to identify vulnerabilities and ensure they are adequately covered by insurance. Trusted data sources will be essential in understanding current and emerging risks, helping to analyze both qualitative and quantitative aspects of exposure.
WTW emphasized that an ideal insurance structure should be tailored to reflect a company’s specific business needs, risk appetite, and cost considerations. While not all risks are insurable, understanding how policies respond to various scenarios is crucial for effective risk management.
Richard Langdon, WTW’s FINEX Financial Institutions Wealth & Asset Management Sector lead, highlighted the importance of assessing the financial impact of identified risks. “It is vital to calibrate the potential financial impacts of risk exposures across the business,” Langdon said.
He also suggested that using risk models based on industry-specific historical claims data could significantly improve risk management frameworks, allowing firms to build a strategy that accurately addresses the actual risks they face.
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