The risk management profession continues to evolve at pace, at least according to our State of the Industry risk management survey.

The results point to a landscape where risk professionals are moving away from insurance buying, and are far more focused on measurement and mitigation of risk.

For instance, we found that less than a third (28%) of risk managers have responsibilities for risk transfer, down from 38% last year, and just 6% of risk managers were planning to prioritise alternative risk transfer in the year ahead.

An increasing number have shifted focus towards risk measurement activities (such as quantitative risk analysis), with 64% saying this is an area of responsibility, compared to 59% in 2024.

Unsurprisingly, the vast majority are responsible for mitigation strategies, including ERM, risk engineering, risk culture initiatives and workshops.

Typhaine Beaupérin, CEO of FERMA, comments: “The increasingly complex and diverse risk landscape is driving the evolving and maturing role of the risk manager. A key aspect of this evolution is the shift from an operational to a more strategic focus within organisations. Simultaneously, the scope of the role is expanding, with a broader application of a risk-based approach throughout the organisation.”

“For many organisations, insurance procurement remains a transactional process that has little relevance to the board”

Steve Tunstall, general secretary at PARIMA, adds: “There is a complex picture in Asia. In some jurisdictions, like India, ERM is genetically designed to be separate from risk transfer. In many other countries it tends to be fairly random, depending on the corporation and the skillsets of the individuals available

“For many organisations, insurance procurement remains a transactional process that has little relevance to the board. This has been brought on the industry itself to some extent by failing to stay relevant to top board risks over the last 30 years.

“The industry as a whole is still in the naive educational stage on alternative risk transfer. Mostly because insurance buyers rely too heavily on their existing brokers and insurers for advice. Asking brokers to advise on ART and captives is mostly like asking turkeys to advise on Christmas.”

A BROADER REMIT

The key strategies that risk professionals are focusing on in the year ahead also reflect a significant shift within the industry. The data shows that while strategies such as ERM, risk identification, and risk data and analytics are all still in the top six priorities for the year ahead, the percentage of risk managers that are focusing on many of these tactics has fallen.

For instance, the number of risk professionals focusing on risk culture has fallen by 14 percentage points, and risk identification and reporting has fallen by 16 percentage points.

The biggest faller is risk data and analytics, which was a priority for 58% of risk managers last year and just 32% this year.

“We expect the evolution of the risk management function into a more strategic and holistic role to continue.”

However, ERM rose by 7% and risk training and workshops also saw a significant boost, rising from sixth place last year to the second most popular strategy today, identified by 51% of respondents as a priority for the year ahead.

Tunstall suggests that where numbers have fallen, there is probably an economic driver. He explains: “In all too many corporations, good risk management is seen as a nice-to-have, back-of-house function rather than a critical business driver. When times get hard, less welleducated CFOs will inflict cuts here and less competent CEOs will be relieved rather than exasperated.”

One area where FERMA is witnessing an increasingly prominent role for risk managers is in environmental, social and governance (ESG) considerations. According to FERMA’s Global Risk Manager Survey 2024, 57% of risk managers are currently involved in assessing ESG related risks, marking a 22% increase since 2022.

Beaupérin notes that this expanding remit is also evident in the increasing interest by risk and insurance managers in using captives to support positive ESG outcomes. She says: “Given the continued volatility of the risk landscape and the growing recognition of the competitive advantage that risk management can provide, we expect the evolution of the risk management function into a more strategic and holistic role to continue.”

PREPARING FOR THE FUTURE

In terms of the biggest risks for the year ahead, cyber remains the top threat, with operational risk staying in second place. Unsurprisingly, geopolitics has jumped up to the third spot and is now a top concern for 53% of businesses compared to just 23% last year.

The biggest fallers are ESG, which is seen as a top risk by just 17% of organisations compared to 38% last year and people risk – highlighted by just 38% of businesses compared to 56% in 2024.

Tunstall comments: “Geopolitics is the standout evolving topic for 2025, as the Trump administration has bought deep uncertainty to boardrooms globally. This will likely trigger a global economic downturn, so people risk, and other internal concerns, will drop down the priority list when funding is tight.”

“It is crucial that companies… also recognise the importance of developing and integrating strategic frameworks”

Beaupérin says that the survey responses align with the key focus areas identified in the Global Risk Manager Survey. However, she cautioned that risk managers must not get so overwhelmed by immediate crises that lose sight of emerging threats.

She explains: “Risk managers and their organisations are confronting an era of polycrisis, marked by an unprecedented series of interconnected risks. However, there is a danger that companies may be focusing exclusively on short-term risks, neglecting to plan effectively for those further down the road.

“It is crucial that companies… also recognise the importance of developing and integrating strategic frameworks to address evolving societal, business and environmental risk dynamics over longer time horizons.”

ALL EYES ON RISK

One overwhelming message from the survey was that risk has been elevated in organisations, largely driven by the shocks including the pandemic and war in Europe. One CRO said that the turbulence of the last decade had resulted in “more rigour around risk management and governance, and increased focus on controls and learning lessons from risk events”.

Another said that: “Event response practices have become more agile [and] most leaders have better accountability for risk”, while a third said: “ERM [has become] more embedded in strategic planning and all major company programmes.”

Clearly, the role of the risk manager is becoming increasingly strategic, with practitioners engaging more at the board level and taking on responsibilities that contribute to shaping corporate strategy and direction.

“This is one of the most volatile periods in the history of humanity.”

However, Beaupérin warns that further work is needed to elevate the status of the risk management profession within organisations. “There must be a greater focus on and investment in accelerating the evolution of the risk function to keep pace with the fastchanging risk environment and expanding regulatory requirements,” she says.

“As part of this, risk managers should assume a more prominent role in guiding corporate strategy – not only in addressing key business risks but also in facilitating e«orts to capitalise on the opportunities that arise from these strategic risks.”

Tunstall adds: “This is one of the most volatile periods in the history of humanity. We have ended a period of 46 years of global American hegemony. This brought huge stability, for corporations – in particular, benefits in global trade and efficiencies. A multipolar high tariff world looks very different, especially when blended with the threat and promise of AI and potentially accelerating impact of climate change.”

BUDGETS REMAIN STATIC

The data shows growing confidence in the controls suites that businesses have. Last year, 79% said that their controls were at least partially effective, compared to 83% this year. The percentage who say controls are fully effective has remained the same, while those who think controls are inffective have fallen.

Meanwhile, 66% of risk managers say their budgets have stayed the same from last year to this year, compared to 56% previously. But that difference was felt at both ends, with fewer saying it had increased (21% versus 29%) and fewer organisations seeing budgets cut (13% versus 15% last year).

Beaupérin says: “This shift reflects a growing recognition of the role that risk management can play – not only in facilitating risk management, mitigation or transfer, but also in sharpening the competitive edge of companies amid an increasingly turbulent and volatile business landscape.”

However Tunstall concludes with a final note of caution: “Let’s see what happens if we enter a full global recession in late 2025 and 2026.”