Airmic 2024: Asking the big questions

Every week, Airmic polls its members on some of the biggest issues facing the risk industry.

Here we have gathered together some of the most interesting results, and consider what this means for the risk professionals managing these threats on behalf of their organisations.

GEOPOLITICS

Over the course of 2024, around half of the world’s population will go to the ballot box.

A report recently published by WTW on the “year of elections” highlighted the rise of populism and geopolitical impact as among the top risks to watch out for as the year unfolds, something that is echoed by Airmic’s member survey.

The WTW report drew attention to elections in “anocracies” – countries where elections are neither free nor fair, but political power is contested nevertheless – such as Iran and Venezuela.

Julia Graham, CEO of Airmic, says: “In a world of increasingly interconnected risks, and with so many elections happening within a short space of time, there will naturally be a tendency for the geopolitical impact from these elections to be amplified.”

Airmic survey respondents were also concerned about the Israel-Hamas war, as well as the diversion of global attention away from the Ukraine crisis.

Leigh-Anne Slade, Airmic’s head of media, communications and interest groups, says: “All of these geopolitical megatrends are individually concerning for Airmic members, but what is of most concern is that they are all occurring at the same time.”

Against this backdrop, more risk professionals (56%) are tracking social media to monitor elections. By comparison, during the COVID-19 pandemic, only 19% of respondents in an Airmic survey said tracking social media was useful in monitoring important developments.

THE TAKEAWAY: MONITOR EVERYTHING

Airmic’s head of research, Hoe-Yeong Loke, says: “At a time when elections are increasingly won and lost in the digital sphere, it is important that risk professionals and their organisations track social media, while being aware of the malignant impact that AI deep fakes can have on our democracy.

“We should not underestimate the links between geopolitics and the ‘year of elections’ we fi nd ourselves in. There have also been protests in Israel against Prime Minister Benjamin Netanyahu to call for early elections, the results of which will of course determine the trajectory of the Israel-Hamas war.”

TECHNOLOGY 

As many as 50% of all organisations have not conducted artificial intelligence risk assessments.

This finding echoes results from Riskonnect research conducted last year, which reported that only 9% of companies globally said they are prepared to deal with the risks associated with AI.

In more positive news, the topic of AI is now on the board’s current agenda for 78% of Airmic survey respondents.

This is a significant change from a 2023 survey by the National Association of Corporate Directors (NACD) in the US, which showed that while 95% of directors acknowledge that AI will have a significant future impact on their businesses, only 28% said it was a regular feature in their board’s discussions.

Graham says: “When initiatives around generative AI originate at the top – at the board level – organisations see clear benefits from that strategic leadership on one of the key issues facing businesses today.

“Boards need to be confident and informed about the outcomes of AI decisions that can affect the lives and well-being of people in wide-ranging ways.”

However, despite the clear business impacts of AI, organisations are treating the ethical risks from its use together with other similar moral risks, said 59% of risk managers.

Respondents were almost evenly split as to whether they thought AI ethical risks ought to be treated separately.

TAKEAWAY: AI NEEDS NEW FRAMEWORKS

As AI applications are more rapidly being adopted by organisations and individuals, respondents thought it sensible to give AI ethical risks extra visibility and attention within the risk management frameworks and processes.

This comes as more bodies are calling for organisations to establish AI ethics committees and separate AI risk assessment frameworks, to steer through contentious situations relating to ethics.

Loke says: “AI has been flagged as an emerging risk for some time by our members organisations. Their boards are discussing AI risk frameworks and risk assessments. But they are also very focused on how they can use AI as a competitive advantage.”

Graham adds: “Research indicates that most organisations, when they do conduct an AI risk assessment, are using traditional risk assessment frameworks better suited to the pre-AI world of assessment – this is an area of risk management still in its infancy for many.”

CLIMATE

Some 52% of organisations face challenges translating their ambitions around their climate transition plans into action, with lack of data and budget cited as the key factors.

While a 2023 KPMG survey showed that 27% of respondents found “building the business case” the most difficult in developing and implementing their climate transition plans, no respondent selected that option in the Airmic survey.

There are opportunities for organisations that have embarked on climate transition, but they are facing pain points that have meant their climate ambitions have taken some time to translate into action.

THE TAKEAWAY: THE CHALLENGE CONTINUES

Loke says: “Our members say it is a ‘mammoth undertaking’ to understand the full carbon impact throughout their supply chains – so-called Scope 3 emissions – let alone ensuring compliance by all their suppliers and stakeholders.

“At times, they have had to rely on low-quality data from their supply chain partners, or have had no option but to make estimations based on third-party sources such as industry averages.”

“Generating capital expenditure, to fund projects to meet climate targets within set time frames, has also proven to be a challenge for Airmic members.”