Icici Lombard Irm India Risk Report 2023 - 2

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CONTENTS
1. Introduction......................................................................................................................................................................... 3
2. Forewords...........................................................................................................................................................................5
3. Executive Summary..........................................................................................................................................................9
4. Global Risks Landscape..................................................................................................................................................11
5. India Risks Landscape................................................................................................................................................... 15
6. Risk Perceptions of India Inc........................................................................................................................................ 21
7. Preparedness to face risks in India Inc......................................................................................................................31
8. Risk Management and Insurance.............................................................................................................................. 38
9. Appendix I: Survey Methodology.............................................................................................................................. 46
10. Appendix II: References............................................................................................................................................... 48
11. Key Contributors............................................................................................................................................................. 49
ICICI LOMBARD – IRM INDIA RISK REPORT 2023 1

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PREFACE
In an era marked by what the World Economic Forum’s Risk Report 2023 has aptly dubbed “poly-crises,”
the global landscape is rife with uncertainties. Yet, amidst this turbulence, India stands at the threshold of an
extraordinary decade of growth. Forecasts predict that India’s GDP will double from USD 3.5 trillion in 2022,
to a staggering USD 7.5 trillion by 2031, positioning it as the world’s third-largest economy in the near future.
This extraordinary trajectory sets the stage for a profound transformation in India’s business landscape. As
we navigate a complex terrain of evolving risks, it is imperative that we steer our course toward sustainable
growth. This journey demands: identifying and comprehending potential risks, proactively preparing to
face these challenges, and deftly manoeuvring through the dynamic economic landscape to unlock our full
potential.
Hence, this risk report takes on the formidable task of conducting an exhaustive analysis of both global
and India-specific risks. Its purpose is to offer valuable insights into the prevailing economic environment,
to explore industry perceptions of risk, and to evaluate our readiness as an industry to embrace this
transformative journey – seizing the opportunities that beckon us.
7.5 TRILLION
3.5
TRILLION
Forecasts predict that India’s GDP will double

from USD 3.5 trillion in 2022, to a staggering
USD 7.5 trillion by 2031, positioning it as the world’s
third-largest economy in the near future.

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1. INTRODUCTION
About ICICI Lombard:
ICICI Lombard, is one of the leading private general insurance company in India, boasts a robust framework
and governance mechanism. With our diversified exposure across geographies we aim to minimize client’s
risk.
The Company offers well-diversified range of products through multiple distribution channels, including
motor, health, crop, fire, personal accident, marine, engineering, and liability insurance. Our value proposition
is driven by a promise to be the best partner for our customers. With a legacy of over 21 years, ICICI Lombard
is committed to customer centricity with its brand philosophy of ‘Nibhaaye Vaade’. The company has issued
over 32.7 million policies, settled 3.6 million claims and has a Gross Written Premium (GWP) of ₹217.72 billion
for the year ended March 31, 2023. With 305 branches and a dedicated team of 12,865 employees as of the
same date, ICICI Lombard is unwavering in its commitment to customer-centricity.
About IRM (Institute of Risk Management):
Founded in 1986 and headquartered in the UK, the Institute of Risk Management (IRM) stands as the
global leader in Enterprise Risk Management (ERM) examinations, qualifications, and thought leadership.
With a presence spanning 143 countries and over 35 years of driving excellence, IRM has consistently
upheld the highest standards in risk management. The IRM India Affiliate, committed to expanding the
global enterprise risk management ecosystem in India, brings forth top-tier education through the 5-level
certification track and knowledge to elevate organizational outcomes.
Renowned as trailblazers in the field of Risk Management, we, ICICI Lombard and IRM, have united in the
creation of this report, with a shared objective of enhancing risk awareness and preparedness across sectors.

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About the Report:
This report emerges from our collaborative effort, aimed at augmenting risk knowledge and readiness
levels across sectors. It takes a deep dive into the most pressing risks affecting various industrial segments
in India, both in the short term and the long term.
Specifically, it offers a detailed analysis of risk trends in ten key sectors: BFSI, Energy & Utilities, FMCG,
Pharma, Hospitality, Infrastructure & Real Estate, Logistics, Manufacturing & Distribution, Services, and
Media & Technology.
The report’s primary focus is threefold:
1. Maturity of Enterprise Risk Management Practices in India Inc.: This segment evaluates the maturity
of the industry’s risk management practices based on five critical criteria, shedding light on areas that
require improvement.
2. Risk Preparedness of India Inc.: Here, we assess the industry’s readiness to manage inherent risks,
evaluate its capacity to absorb risks, and analyse the adequacy of investments made to address
unforeseen circumstances.
3. Insurance Practices: Through a comprehensive survey, the report evaluates the parameters considered
when purchasing insurance for specific risks. It also provides recommendations for enhancing the client
experience and minimizing risk through improvements in insurance products.
Drawing from insights shared by risk leaders across sectors and risk experts from the realms of insurance
(including Claims and Underwriting teams), this report unveils emerging threats in the long term. It serves as
a valuable tool for charting the course of improvement in our collective understanding and management of
risks. We extend our gratitude to industry leaders who have contributed to this report, both by responding
to the survey and by sharing their perspectives on our findings.
As we prepare to embark on this defining decade, let this report be your compass, guiding you through
the uncharted territories of risk and opportunity. Together, we shall navigate the ever-evolving landscape of
risk, unlocking the full potential of India’s growth opportunities.
This report emerges from our collaborative effort, aimed at augmenting risk
knowledge and readiness levels across sectors. It takes a deep dive into
the most pressing risks affecting various industrial segments in India, both
in the short term and the long term.

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2. FOREWORDS
Dear Readers,
I hope this letter finds you and your family safe and in great
health! In this ever-evolving world where risks are multiplying
and evolving rapidly, we feel that a progressive and socially
responsible enterprise needs to be committed to ensuring holistic
development for a better tomorrow.
Having a well-defined governance practice and a sound Enterprise

Risk Management framework in place can help establish a strong
work ethic that will anchor all of our operations. Recent years of
uncertainty have taught us that prioritizing long-term resilience is a
Mr. Sanjeev Mantri
more prudent choice than pursuing short-term profitability.
MD & CEO
ICICI Lombard GIC Limited India’s vast and diverse industrial landscape is standing on a cliff
of unparalleled opportunities. The winds of change are sweeping
across our nation, ushering in a new era of growth and transformation for India. As the MD & CEO of ICICI
Lombard, it is with great pleasure that I introduce this Annual Risk Report, which explores the evolving
landscape of risks, their impact on India Inc., the prevailing capability and culture in the field of risk.
Being a top player in the private general insurance sector, we seek to address issues that have an impact
on both our local communities and the global community. While insurance has a crucial role in acting as a
safety net for businesses, it is equally vital to revisit the fundamentals of risk management. This report is a
testament to our commitment to fostering the growth of India Inc. It delves deep into the multifaceted risks
that our industries face and the transformative potential of a strong risk culture.
With our vision of becoming the “most value-creating and admired risk solutions company in India, with a
global footprint”, and leveraging our expertise in risk management, we embarked on this journey into risk
management a few years ago with the release of the Corporate Risk Index Report and the organization of
the India Risk Management Awards on an annual basis.
As a step further in that direction, we have developed the Annual Risk Report in collaboration with the
Institute of Risk Management (IRM), which is a globally recognised leader in the field of risk management.
In this report, we examine the impact of economic, political, social, climate change, and unforeseen market
disruptions. Client companies will gain valuable insights into expense management, risk minimization, and
the establishment of a focused and innovative environment.
At the core of ICICI Lombard lies our unwavering commitment through our slogan, “Nibhaye Vaade”,
which is a promise to work towards a better tomorrow, stimulating positive and long-lasting changes in
our clients’ organizations. This risk report goes beyond mere awareness; it is about making a substantial
impact and empowering industries to effectively navigate the complex risk landscape.
I invite you to explore the contents of this report, and in doing so, join us in our mission to safeguard
what matters most and uphold the trust our clients place in us. With this promise in mind, we undertake
this expedition of exploration, reflection, and strategy building. Together, we can harness the immense
potential that lies within the evolving risk landscape to secure a prosperous future for India Inc.
Thank you for being a part of this wonderful journey!

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As we stand at the dawn of a new decade, the nature of risk

continues to evolve at an unprecedented pace. The entwined
destinies of technology, environment, and society are charting
new territories of uncertainty, demanding our renewed attention
and adaptation. Recognizing the imperative of understanding
these shifting paradigms, IRM India Affiliate and ICICI Lombard are
proud to unveil the first issue in our Master The Risks series –
titled Building The Risk Culture for India Inc: Harnessing the Future.
The symbiotic relationship between professional expertise and

insurance intelligence allows for a comprehensive exploration of
the multifaceted nature of risks on the horizon. This report delves
Mr. Hersh Shah
into future risk themes that are set to shape our world, ranging
CEO, IRM India Affiliate
from the intangible landscapes of cyber threats and technology
disruptions, to the tangible realities of climate change, geopolitical tensions, and societal shifts.
But understanding risk is only half the battle. Mastering it – turning potential threats into opportunities
for growth, resilience, and innovation – is the true challenge and necessity. Our aim is to empower
businesses, governments, and individuals with the knowledge and tools to navigate these uncertain
waters with confidence and foresight.
This collaboration between IRM India Affiliate and ICICI Lombard is not merely a thought leadership
exercise, but a call to action. As the world’s leading professional body for ERM qualifications, we hope that
by shedding light on the risks of the future, we can inspire proactive strategies, foster collaborations, and
cultivate a culture of preparedness and resilience.
This Risk Report seeks to provide an illuminating beacon amidst these uncertainties, synthesizing data,
expertise, and foresight to unravel the myriad risks that shape our present and future. Prepared with
meticulous research, analysis of survey results and interaction with the industry, the report not only
delineates potential threats but also underscores opportunities inherent in these challenges. Here’s to
mastering the risks of the coming decade.
The symbiotic relationship between professional expertise and

insurance intelligence allows for a comprehensive exploration of the
multifaceted nature of risks on the horizon. This report delves into
future risk themes that are set to shape our world, ranging from the
intangible landscapes of cyber threats and technology disruptions,
to the tangible realities of climate change, geopolitical tensions, and
societal shifts.

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In the dynamic landscape of risk management, the role of an

insurer has evolved significantly. Our primary focus today is to
empower and educate our customers on effectively navigating
through challenges on their path to success. Hence, it is critical
that businesses recognise risk management as an essential
component of their operations.
At ICICI Lombard, we recognise the pivotal role we play in not just

providing insurance but in fostering a culture of risk awareness and
resilience. Our commitment to this ethos is mirrored in numerous
initiatives aimed at forging partnerships with our customers.
Mr. Sandeep Goradia This includes various annual events such as – publication of the
Chief – Corporate Solutions Group Corporate India Risk Index (CIRI) report, Risk Master Class by
ICICI Lombard GIC Limited Industry experts, India Risk Management Awards (IRMA), etc.
It is essential to channelise the abundance of information in an appropriate manner, and our goal is to
convert “Explicit-to-Tacit knowledge”. This report focuses on enterprise risk Maturity, preparedness of
organisations, focus areas to improve risk maturity to face specific risks, etc.
In the spirit of partnership and our commitment to empower our clients, we are proud to present this
distinctive report, developed in collaboration with the Institute of Risk Management (IRM). Our collective
efforts have culminated in a resource that offers insights which will help fortify risk management practices.
This report is a testament to our commitment to equip organisations with the knowledge and risk minimising
advisory necessary to mitigate and thrive amidst challenges.
I am sure that this report will prove to be valuable not just for the Risk leaders of the industry but for all
stakeholders of Indian enterprises.
Happy reading!
Looking forward to your feedback and comments.
It is essential to channelise the abundance of information in an

appropriate manner, and our goal is to convert “Explicit-to-Tacit
knowledge”. This report focuses on enterprise risk Maturity,
preparedness of organisations, focus areas to improve risk maturity
to face specific risks, etc.

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Many people talk about how the world changes at the “speed of
risk,” which means business decisions can no longer be measured
according to the calendar but rather by keeping one’s finger on the
pulse of the changing risk environment. The India Risk Report 2023
is a very important and timely report from ICICI Lombard and IRM
India that will help business leaders in India better understand what
is changing in their risk environment. With its focus on both short-
term and long-term risks, it will help decision makers better deal
with the uncertainties of today’s world. The value comes not just
from the extensive data cited in the report, but more so from the
expert analysis that will help readers understand the implications of
Mr. Paul Sobel the changing risk landscape.
Former Chairman In addition to the perspectives on the risk landscape, the report
Committee of Sponsoring
provides valuable information about risk management maturity.
Organisations (COSO)
The data on risk management maturity illustrates the wide array
Strategic Advisory Board –
IRM India Affiliate of opportunities to improve risk management in India. It’s notable
that only a little more than 10% of respondents believe they are at
the Transforming stage of risk maturity. And clearly there are pervasive opportunities to improve the level
of risk talent in organizations and integrate ESG risks into the organizational risk management programs.
The discussion of current and desirable risk management practices will provide risk leaders and decision
makers with a better foundation for making future risk decisions. It also provides insights on how to
leverage insurance products and services to manage a wide array of risks across all industries.
This report leverages both ISO 31000: 2018 Risk management – Guidelines and COSO’s 2017 framework
titled Enterprise Risk Management – Integrating with Strategy and Performance, thus demonstrating the
report’s worldwide applicability. I found it to be both valuable and interesting to read. It should be required
reading for all risk leaders and decision makers in India.
With its focus on both short-term and long-term risks, it will

help decision makers better deal with the uncertainties
of today’s world. The value comes not just from the
extensive data cited in the report, but more so from the
expert analysis that will help readers understand the
implications of the changing risk landscape.

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3. EXECUTIVE SUMMARY
Establishing a strategic risk culture within an organization necessitates development of dynamic, and
continuously improving processes, technologies, and a cultural ethos.
This will enable an organization to:

– Identify applicable risks within an environment characterized by Brittleness, Anxiety, Non-linearity, and
Incomprehensibility, commonly referred to as BANI.
– Proactively address these risks in a thorough and holistic manner.
– Effectively mitigate these risks as they materialize into tangible events or incidents.
This report comprises three key chapters that offer an overview of the industry’s progress in advancing risk
culture. These aspects are discussed in the context of evolution of global and India specific risk landscapes.
Preparedness to Face the Risks

The respondents were asked to rank short- and medium-term risks from the list of 11 potential risks. Based
on their responses, we have categorized these risks into five priority areas. The detailed chapter on Top
Risks also provides insights on how the priorities differ across various industry sectors.
The table below shows a synthesis of three components of the survey data – risk rankings, organizational
preparedness levels, and the utilization of insurance or non-insurance solutions for managing risks. The
goal is to assess industry’s readiness to confront identified risks.
Short-Term Priority Medium-Term % of organizations % of organizations

Priority fully prepared to not deploying
Risk face a risk Insurance or
non-Insurance
solution for a risk
Cybersecurity Risks 1 1 33% 28%
Macroeconomic 2 1 18% –
Business Interruption 3 2 29% 19%
Technology 4 1 26% 36%
Legal / Regulatory Risks 4 3 26% 27%
Climate change / Natural Disasters 5 4 14% 34%
Funding / Investment Risks 5 3 16% –
Talent – 4 19% 41%
Civil Strife / Geopolitical issues – 5 9% 38%
Pandemics – 5 9% 39%
Fire Hazard – 5 18% 25%
Table 3.1: Depicting the risk priorities in short and long term, with preparedness through Insurance as a solution.

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Full preparedness includes having a strategy, relevant skills and making investments in managing the
specific risk. However, less than 33% respondents indicated full preparedness even for the top risk.
Deployment of insurance or non-insurance solutions is the other side of the coin. Even for the top ranked
Cyber Security risks, 28% of respondents indicated having neither an insurance nor a non-insurance
solution in place to manage the risk.
This underscores the need for organizations to view insurance as an integral part of risk management
process while strengthening processes related to managing events/incidents. Detailed chapters in this
report offer insights into how the industry uses insurance as a solution and how it measures the costs of
insuring risks.
Another crucial insight pertains to maturity of Enterprise Risk Management within organizations, emphasizing
the necessity of making risk management systems organization-wide and consistent across departments.
Insight from Industry Wide Claims Trends

We analysed industry claims over the past five years based on NL-37 (Claims Data) forms filed by major
general insurance companies with Insurance Regulatory and Development Authority of India (IRDAI).
The key conclusions are:
l Climate and environmental factors have led to significant increases in categories such as Fire, Marine
Cargo claims, highlighting the complex and non-linear impact of environmental and climate – related
risk on organizational risks.
l Factors such as the growth in e-Commerce, borders opening within India through the introduction of
GST, and increased export business due to geopolitical factors have resulted in both increased claims
and greater usage of insurance.
l Various liability claims have increased indicating need for robust management of liabilities risks
As an integral component of strategic risk intelligence, regular review of global risks, contextual risks,
incidents/events and near-misses is essential to identify and effectively manage new risks.
Cultivating a Risk Culture

Building a culture oriented towards delivering strategic risk intelligence is a journey that involves enhancing
processes, technology and organizational and human aspects. The decisions on the extent and timing of
these improvements depend on each organization’s unique context.
While this executive summary synthesizes the main findings, the report’s detailed chapters provide deeper
insights into the industry’s current status. Individual practitioners can use this information to guide their own
improvement journeys or benchmark their efforts against the overall industry-wide response.
Fostering a mature Risk Culture serves not only to enhance

an organisation’s readiness to confront challenges but also
empowers them to judiciously embrace risk as a means to
seize future opportunities.

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4. GLOBAL RISKS LANDSCAPE
This section dives into the evolving landscape of l In the latest 2023 report, only one risk
global risks, comparing perspectives from both each from the technology and geopolitical
a global and business viewpoint. To provide a categories appeared in the top 10 risks for
detailed analysis, we have consulted various both the short and long term. All other top
reputable sources: risks fell under the environmental and social
categories.
l Overall Risk perspectives are based on well
accepted risk reports and articles from the
World Economic Forum and Eurasia Group The Eurasia Group Outlook:
l For the Enterprise view we have referred l Apart from geopolitical risks, the Eurasia
to IRM Risk Trends reports and research Top Risks reports have observed the rise of
information from Journal of Risk and Financial topics such as energy prices, cyber security,
Management technology, climate, and green energy to the
top positions.
l For individual enterprise and sector views, we
have referred to annual reports and US SEC l Since 2020, various forms of Covid-19 have
10K filings of 20 global organizations. consistently been identified as top risks.
l The 2023 report also highlights the

Global Risks: Environmental and Social emergence of Gen Z, the first generation to
Factors, Poly Crises have grown up entirely in the internet age, as
a key topic. Other prominent risks include the
For nearly two decades, the World Economic
stalling of global development, inflation, and
Forum (WEF) Global Risk Reports have consistently
water stress.
offered an extensive and inclusive perspective on
global risk perceptions. These reports capture the
insights and perspectives of experts from diverse The Current State: Poly-crises, Geopolitical
sectors such as academia, business, government, Recession
international organizations, and civil society.
According to the WEF 2023 report, the global
Similarly, Eurasia Group has been producing its
landscape has undergone a series of crises,
renowned Top Risks reports since 2016. While
leading to a state of Poly-Crisis at present. Poly
their primary focus is on political factors, they go
Crisis was a term coined by French philosopher
beyond that to provide a broader understanding
Edgar Morin in 1999 and became a buzzword in
of the prevailing risks worldwide.
2023 Davos conference of WEF.
Environmental and Social Risks have moved to The complexities of our modern world mean that
the top of the agenda: risks may generate cascading effects, giving rise
The WEF Perspective: to numerous additional risks. This, in turn, can
result in multiple crises in critical areas such as
l Between 2007 and 2015, economic risks
energy supply, cost of living, inflation, food supply,
consistently occupied approximately 50%
and cyber-attacks targeting vital infrastructure.
of the top 5 rankings in both likelihood and
impact. Each of these crises can significantly alter the
l However, from 2016 to 2020, no economic trajectory of businesses for years to come. It is
risk made it to the top 5 rankings. Economic imperative for organizations to comprehend and
risks made a comeback in 2021 and 2022 but effectively navigate these challenges to ensure
disappeared again in 2023. their long-term success.

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Conversely, the Eurasia Group’s 2023 report During the 5 years period 2018-2022, answers to
places emphasis on the notion of a Geopolitical this question have ranged between 5.7 and 6.8,
Recession as its primary message. Moreover, it narrowing to between 5.9 and 6.4 in 2022.
explores the profound influence of social media
and emerging technologies on the socio-political Intentions of investments in ERM has improved
fabric of our world. These factors introduce
Despite the reduction in overall risk score,
additional complexities that demand careful
organizations expect to increase their time and
consideration and strategic planning.
resources allocated to risk management activities,
with highest increase coming from Financial
Heightened Uncertainties
Services sector.
According to the 2023 WEF survey, an astounding
69% of respondents anticipate a turbulent Top Risks over the past 5 years
landscape characterized by ongoing volatilities
The top risks as derived from reports from
across economies and industries, accompanied
2018–2022 are:
by numerous shocks in the next two years.
l Macro Risks
Looking towards the longer-term horizon of ten Government Policies, Economic Conditions,
years, the number of respondents expressing New Digital Technologies, Increasing
similar concerns reduces to 34%. Nonetheless, it is Expectations regarding Social Issues and
noteworthy that a significant 20% of respondents Diversity, Increasing Labour Costs
foresee the possibility of enduring crises and
catastrophic shocks that could have far-reaching l Strategic Risks
implications over the long term. Regulatory Scrutiny, Pandemic Effects,
Disruptive technology innovations, Changes
Thus, on an overall basis, the emerging perspective
in Customer Preferences, Operational Risks,
is that of a high risk environment.
Attracting and Retaining Talent, Resistance to
Change, Cyber Threats, Legacy IT and lack of
The global enterprise view Digital Expertise, Data Privacy, Risk Culture
Against this backdrop of global uncertainties, it Across the years, Operational segment risks
is interesting to note how enterprises view the have been receiving high scores. Efficiency and
environment. effectiveness of operations have remained a key
concern of enterprises around the world.
A noteworthy study, featured in the prestigious
Journal of Risk and Financial Management
(JRFM) in January 2023, depicts evolution of risk Risks identified by individual enterprises
perceptions of industry across a decade based
While the previous section discussed the
on 10 years risk surveys conducted by NC State
enterprise view as a whole, it is expected that risks
University in collaboration with Protiviti, a leading
faced by a business will depend upon the sector
global consulting firm.
in which it operates, as well as its own context and
realities.
The Overall Risk Perception has stayed around
same levels The table on page 13 shows key risks as described
by organizations from various sectors in their
The surveys measured the ‘perception of severity latest (2021 or 2022) annual report or the SEC 10-K
and magnitude of total risks faced’ on the scale filing. We have referred to reports of around 20
from 1 (Extremely Low) to 10 (Extremely High). companies across the sectors.
According to the 2023 WEF survey, an astounding 69% of respondents

anticipate a turbulent landscape characterized by ongoing volatilities across
economies and industries, accompanied by numerous shocks in the next two
years.

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Sector Business Risks Operational Risks Legal and Regulatory Risks
• Intense competition, new business • Strain due to expansion • Legal and regulatory,
models • Fluctuations in growth rates • Liability
• International operations • Optimization of fulfilment network • Government contracts
• Variability of retail business • Data, security, systems
• Fraud interruption
eCommerce • IPR • Suppliers, Inventory
• Foreign exchange • Investments
• Payment
• Green energy • Cyber-attacks • Political / Regulatory

• Pandemic • Commodity Prices Changes
• Energy / Fuel Prices • Estimation Risks • Design of power market,
• Resource development • Business Interruption permits and licensing
• Climate Change • Geo-political and Civil Strife • Liability from litigation or
government actions
Energy • Failure to re-negotiate contracts / • Multi-country operations risk
concessions • Increasing stakeholder
• Energy delivery systems
attention to ESG
resilience
• Market, Liquidity, credit • Security, cyber-attacks • Legal liabilities

• Geopolitical • Failure to satisfy obligations • Govt action
• Business operations for residential mortgage • Capital requirements
• Regulatory, Compliance and legal securitisation • Accounting
Financial
Services • Reputation • Inadequate risk management
framework
• Macroeconomic conditions • Geopolitical • Regulatory

• Social conditions • Supply chain disruptions
• Disruptions in credit market • Cost fluctuations
• Global and local competitors • Reliance on third parties
FMCG
• Customer relationships, Demand • Information security/operational
• Reputation technology
• Trends in managed care • Pricing control • Intellectual property

• Competitive products • Development, regulatory approval protection
• Revenue concentration in a few and marketing of products • Third party IP claims
products • Post-authorization approval data • IT and security
• R&D • Supply chain • Business development
Pharma • Global operations • Manufacturing and distribution activities
• Counterfeit products • Changes in laws and
accounting standards,
Healthcare Regulation
• Impact of Economy on client • Acquisitions and Alliances • Local legal, economic,

budgets • Predictability of financial results political conditions
• Failure of innovation projects • Reliance on third parties • Increased scrutiny on
• Competitive offerings • Cyber security and data privacy regulations
• Meeting growth objectives • Financing, Stock Price
Technology • Talent • Ineffective internal controls
• Supplier relationship • Meeting productivity objectives
• Govt business
• Macroeconomic, • Operations (production and • Legal, Regulatory

• Strategic/sector specific (legal/ technology, purchasing, sales
regulatory, market developments), network, IT security, data)
Manufacturing legal • Financial (Foreign Currency, raw
material, liquidity, pension)
Table 4.1: Enterprise risks in 20 global companies of the specified sectors as reported by them in their annual report/
SEC filings.

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The risk profiles of the organizations are l Collapse of Silicon Valley Bank (SVB) and
obviously shaped by the business they are in. Credit Suisse have sent shockwaves through
For example: economies with divergent views on severity
of impact.
l The e-Commerce sector faces risks reflecting
the complex nature of its business, rapid l The Rise of Generative Artificial Intelligence is
growth, international operations, complex IT expected to drive dramatic productivity gains,
setups, suppliers, distributors and impacts of and raise concerns regarding regulating AI.
multiple local and global regulations.
l Post Covid-19, many economies are battling
l Energy organizations’ risk profiles are highly inflation with increased interest rates which
influenced by concerns over replacing fossil may result in reduced growth.
fuels, either by new supplies of fossil fuels or l Tech sector layoffs have created a large
by the supply of alternate fuels, along with
pool of technical talent, which is a risk for
related regulations.
economy but may also be an opportunity for
l B2C FMCG organizations are concerned companies wanting to digitalize.
about market forces, local competition,
customer relationships, and demand and Bodies like the WEF are having strong focus on
supply chain disruptions. environmental and social risks. Businesses are
also paying attention to environmental, climate
l Pharmaceutical companies’ risks reflect and social risks. Environmental, Social and
the complexities of development, approval, Governance (ESG) Factors remain a separate
production, and distribution of formulations topic in various management reports and still not
in a global market, with intellectual property integrated into Risk Management discussions
being a key concern. in enterprises. Some recent annual reports
have talked about Audit Committee discussions
on integration of ESG into Risk Management
Poly-Crises or Moderate Risk framework as well as focusing on the education
Environment? of large number of employees in ESG.
The events that have unfolded since the On the other hand, the severity of risks as
beginning of 2023 are demonstrating that we are rated by enterprises are not as high as those
indeed living in a Volatile, Uncertain, Complex expressed by WEF report which talks about poly-
and Ambiguous (VUCA) world: crises and severe conditions continuing even in
a 10-year horizon. At the same time, enterprises
l Increase in geopolitical tensions with intend to continue or increase their investments
possible impacts on oil prices and supply in ERM.
chains.
Business and Risk leaders need to evaluate the
l Rise in number of extreme weather events all differences in severity ratings between WEF
around the world resulting in infrastructure surveys and enterprise surveys and decide
damage and loss of lives. whether any re-calibration is needed.
The complexities of our modern world mean that risks may generate
cascading effects, giving rise to numerous additional risks. This, in turn, can
result in multiple crises in critical areas such as energy supply, cost of living,
inflation, food supply, and cyber-attacks targeting vital infrastructure.

15
1
5. INDIA
5. INDIA RISK
RISK LANDSCAPE
LANDSCAPE
This section highlights the risk landscape for businesses in India., As the Indian economy holds
This section highlights the risk landscape for businesses in India., As the Indian
significant global importance, certain risks discussed here may also have a global impact.
economy holds significant global importance, certain risks discussed here may also
Throughout our examination of various risks in the India Risk Landscape, we will explore their
impact the global scale. Throughout our examination of various risks in the India Risk
linkages and potential implications for businesses.
Landscape, we will explore their linkages and potential implications for businesses.
India Risk Perceptions

India Risk Perceptions Some of the major risks as identified by experts
The analysis has been drawn from reputed researchers,
Some of the and
major businesses are shown
risks as identified by in the
experts
This section
sources, draws from
including – thereputed sources
Risk Survey of the figure 5.1 depicting
researchers, perceptions
and businesses about
are shownseverity
in the of
including
Reserve Bank of India (RBI), Global of
the Systemic Risk Survey the
Economic risks
figureand
5.1 changes
depictingexpected
perceptionstherein.
aboutThese risksof
severity
Reserve
ProspectsBank of Indiaby
published (RBI),
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World Economic
Bank, World are analysed
risks in various
and changes reports
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therein. Thesebyrisks
the
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Purchasing Reserve Bank in
are analysed ofvarious
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reports Bank, IMF,
published byandthe
Economic
Managers’Outlook published
Index from by IMF,Ratings
S & P Global Purchasing
and S&P Global
Reserve Ratings.
Bank of India, The World Bank, IMF, and
Managers’ Index from S & P Global Ratings
The World Bank report on India’s Climate Risk and S&P Global Ratings.
The World Bank report on India’s Climate Risk
Profile.
Profile.
Increase in
Changes in Risk Severity (Last 6 months)
Risk Severity Cybersecurity Risk
Climate Change Risk

Terrorism
Geopolitical Risk
No change Social Unrest
Access to Funding
Domestic Macroeconomic Risk
Decrease in Global Macroeconomic Risk

Risk Severity Operational Risk
Severity of Risk
Figure5.1:
Figure 5.1:Movement
Movementof
ofrisk
riskmeasures
measuresas
ascalculated
calculatedby
bydifferent
differentstudies.
studies.

16
Macroeconomic Risk services and increased purchasing activity. Input

costs improved, and companies and vendors
Domestic macroeconomic risks are seen at demonstrated ample spare capacity.
moderate severity with a decreasing trend.
However, businesses need to be cognizant of
Access to funding
global factors as they can impact their business
aspirations in India. The risk associated with Access to funding for
organizations is moderate and may slightly
The World Bank’s Global Economic Prospects
decrease in future.
report suggests a decline in global growth, with
the potential for a recession if negative shocks This risk has remained relatively stable over the
occur. RBI’s Systemic Risk Survey confirms this last three rounds of the Systemic Risk Survey.
view and expresses concerns regarding the Additionally, the risk perception regarding the
worsening global macroeconomic outlook. need for additional capital by banks, which
However, the outlook for India remains positive, serves as an indicator of asset quality, has
with strong annual growth driven by robust improved. The risk perception associated with
consumption and investment. Although India’s credit growth by banks has also significantly
growth rate may be affected by global trends, it is improved. This indicates that businesses with
projected to be one of the strongest performers robust plans and operations have ample funding
among emerging economies. opportunities available to them.
Operational Risk Cyber Risk
The operational risk for India is low and the Cyber risks are seen to be of high severity with
outlook is for the risk to further reduce. an expected increase in coming years.
The Purchasing Managers’ Index (PMI) developed As per data disclosed in the Indian Parliament,
by S&P Global provides insights into both input India witnessed 13.91 lakh cybersecurity incidents
and output aspects of operations, offering a in 2022, and it is increasingly evident that
perspective on how organizations perceive enterprises must take proactive measures to
operational risk. strengthen network infrastructure and information
systems to prevent potential operational,
According to the manufacturing and services financial, and reputational losses.. However,
PMI data, Indian companies exhibited strong the real number is likely to be higher, as these
operational performance leading up to May figures only represent incidents reported to the
2023. The Reports indicates favourable Indian Computer Emergency Response Team
conditions, with robust demand for goods and (CERT-In). While the reported incidents in 2022
... enterprises must

take proactive
measures to
strengthen network
infrastructure and
information systems
to prevent potential
operational,
financial, and
reputational losses.

17
were slightly lower than those in 2021 (14.02 can exist for a prolonged period of time causing
lakh incidents), they were significantly higher major disruption.
compared to 2020 (11.58 lakh incidents).
Continued tensions between Ukraine and Russia,
MIT Technology Review has published The as well as emerging tensions in the Taiwan Strait
Cyber Defense Index (CDI) for 2022/23. It is add to the Geopolitical risks. However, changes
the first annual comparative ranking of the in the geopolitical landscape also provide
world’s 20 largest and most digitally forward additional opportunities to Indian businesses.
economies on their preparation against, and While Indian economy has been resilient in the
response and recovery from, cybersecurity face of global events, businesses need to closely
threat. It’s a comprehensive insight report based monitor and assess impact of geopolitical risks
on secondary research, survey, data analysis on global supply chains.
and interviews of experts around the world.
India struggles at #17, despite a digitally forward On the other hand, changes in geopolitical
government and world’s largest IT-enabled landscape also provide additional opportunities
services sector. to Indian businesses. Many companies adopting
China plus one policy have chosen India as a
It is increasingly evident that the enterprises must manufacturing hub. Recent agreements between
take proactive measures to strengthen network USA and India will also fuel this opportunity in
infrastructure and information systems to prevent various sectors.
potential operational, financial, and reputational
losses.
Climate Change Risk
Geopolitical Risk Climate change is categorized as a high level

risk, with a moderate increase in risk perception.
Geopolitical risk faced by companies is seen
India ranks 127th out of 182 countries on the
to be of high severity with moderate increase
ND-GAIN index, which measures vulnerability
expected in coming years.
to climate change and readiness to improve
Constant tension and conflict between countries, resilience. Its vulnerability to climate change is
some of which are going through major debt influenced by its social vulnerability and climate
crises, pose significant risk, especially for variability. India is home to different climate
companies directly or indirectly impacted by regions, from tropical in South India to alpine
these events. Russia–Ukraine conflict and the climate in the Himalayan regions. Combined with
recent Israel–Hamas war have shown us that the vulnerability of a large portion of the urban
geopolitical tensions could erupt anytime and population not having access to well-ventilated
...changes in
geopolitical
landscape also
provide additional
opportunities
to Indian
businesses.
Many companies
adopting China
plus one policy
have chosen
India as a
manufacturing
hub.

18
housing, India could become one of the first for businesses and investors. Situated in a
countries where heat waves could cross the geopolitically fluid zone, there is a moderate
survivability limit of humans. risk from terrorism in India. Additionally, as India
transitions from a developing to a developed
Terrorism and Social Unrest Risks economy, there is also a moderate risk from
Both these risks are classified as moderate risks social unrest as different social groups navigate
with terrorism showing a moderate increase in the changing landscape.
risk while social unrest shows no change in its
risk profile.
Enterprise Risk Perceptions – India
Terrorism and social unrest share similarities
in their nature, as both can have localized In this section, we analyse a sample of
immediate impacts but also significant marquee companies from key industrial sectors.
downstream effects on the economy and Management Discussion and Analysis sections
business environment. These events disrupt of companies’ annual reports discuss risks faced
operations, damage physical assets, and pose by the organizations and their plans to tackle
risks to supply chains. However, the most these risks. Our examination includes companies
significant damage arises from their impact on from multiple sectors, offering a broader
consumer confidence, reputational damage understanding of the risk landscape from an
to regions or countries, and uncertainty industry-specific perspective.
Sector Risks
Supply chain disruption, Pandemic, Data privacy and cybersecurity, Geopolitical and macro-
Automobile economic risks, Intensifying competition, Exchange rate and interest rate fluctuations,
Downgrade in credit ratings, Semi-conductor shortage, Climate change
Energy Climate change and energy transition, Data privacy and cybersecurity, Environmental risks,
(Oil and Gas) Climate change, Air quality, Biodiversity and Ecosystem Conservation, Human resource risk
Financial Macro-economic risks, Geopolitical situation, Global commodity prices, Cyber-security risk,
Services Climate Change, Credit risk, Liquidity risk, Policy and regulatory risk
Supply chain risk, Pandemic, Macro-economic risks, Information security, Exchange rate
FMCG
fluctuation, Shortages of key staff, Climate change, Brand preference risk
Geopolitical volatility, Supply chain disruption, Data privacy and cybersecurity, Climate Change,
Pharmaceutical
Environmental risk, Product responsibility, Pandemic, Economic and geopolitical risks, Pricing
and Healthcare
risks, Statutory and legal compliance, Patent protection risks
Macroeconomic factors, Climate change, Geopolitical risks, Cybersecurity, Foreign exchange

Real Estate
rate fluctuations, Interest rate fluctuations
Pandemic, Cybersecurity risks, Inventory levels, Workforce management, Adapting to market

Retail trends and buying behaviour, Information risks, ESG risks, Inadequate availability of retail
spaces, Intense competition, Ecommerce, Supply side constraints
Pandemic, Intense competition, Macroeconomic risks, Geopolitical risks, Information security

Software
and cybersecurity, M&A integration risk, Currency volatility, Employee health and safety risk,
and Services
Hybrid working model, Litigations, Sustainability risks
Regulatory and political uncertainties; Market competition; Economic uncertainties; Network

Telecom
infrastructure; Data privacy
Pandemic, Competition, Workforce management, Movement to remote location, Exceptional

Transportation
variation in fuel prices, Liquidity management and profitability
Table 5.2: Identified risks in various sector specific Indian companies, based on their respective annual reports.

19
We analysed companies across traditional and demographic dividend being enjoyed by

new-age sectors. Like we discussed in the Global India and the relatively higher availability
risks section and as expected, the risks identified of staff in India across most educational
by these companies as their biggest challenges backgrounds.
are quite diverse. They reflect the industries l Regulatory risk is a concern that companies
the companies operate in and the markets they
both Indian and Global share. This is an
operate in. The key observation from studying
expected challenge as changes being made
company filings and annual reports is that there
to regulations and compliance requirements
are several risks affecting companies beyond the
could affect the operations of businesses.
ones identified by experts and researchers Often
these risks are sector specific. Some of the key
risks that belong to this category are Intensifying Key Takeaways
Competition, Talent Shortage, Availability of
space, M&A integration and Input material price The global events that have unfolded since
volatility. the beginning of 2023 demonstrate this to be
a volatile, uncertain and risky environment. In
The sector wise top risks are similar for India contrast to the global environment, the Indian
based companies and global organizations with environment appears to be less risky, with an
following observations: economy poised for rapid growth in the coming
decade.
l Litigation is a concern appearing more
frequently in global companies as compared Risks facing India, as highlighted in reports of
to Indian companies, possibly indicating that the Reserve Bank of India, The World Bank,
Indian markets are still not highly litigious. IMF, lead us to the conclusion that the highest
severity risks facing Indian companies are
l Macro-economic risks appear with a higher
Global Macroeconomic Risk, Cybersecurity Risk,
frequency in global companies’ annual
Climate Change Risk and Geopolitical Risk. When
reports. This indicates increased fears of
we study annual reports of Indian companies,
recessionary environment at a global level
they also identify several other risks to their
and relatively lower inflationary pressures as
businesses like talent/workforce management,
well as fears of recession in India.
input price volatility, M&A integration, and
l Almost all the Global companies’ disclosures competition risk.
mention cybersecurity risk as one their top
concerns. However, this risk is conspicuous The study of annual reports also reveals that
by its absence in the disclosures of almost there is a considerable variation in the number
half the Indian companies studied. This and nature of risks identified by companies
shows that Indian businesses aren’t yet belonging to the same sector. Additionally, the
placing as much importance on managing number of risks identified by global companies
data privacy, IT and cyber security risks. in their annual / SEC 10-K reports is much larger
compared to the number of risks reported by
l Workforce management related risks appear Indian companies.
with a higher frequency in global companies’
annual report. This could be due to the
Combined with the vulnerability of a large portion of the urban

population not having access to well-ventilated housing, India
could become one of the first countries where heat waves could
cross the survivability limit of humans.

20
Risk Identification is a crucial step for organisations in the short term

for operational stability and building resilience, as well as in the long
term to align strategic objectives to emerging risks and prepare for
uncertainties ahead. Integrating Enterprise Risk Management (ERM)
into the organizational culture is key to a sustainable enterprise, as it
not only highlights the negative aspects of risks, but also highlights
opportunities for value creation. Proactive measures can mitigate many
risks if Corporate India joins hands with the Government and influences
policy decisions. We need strong leadership to understand the impact of
interconnected risks to organisational stability.
Ms. Jyoti Ruparel, CMIRM
In addition to the much talked about cyber security risks, geopolitical
Certified Member of the Institute of
tensions and technological disruptions for India, some risks I see lurking Risk Management
around the horizon are: Senior Advisor – Digital Risk
Transformation, PwC India
l population growth and scarcity of resources, balancing needs vs.
availability
l Industrial development that can have hurdles around funding, regulations etc
l India’s diverse society and politics play can lead to polarisation and hence tensions affecting
businesses and individuals alike
My pet peeve is that organisations appear to be avoiding addressing environmental issues such as pollution,
deforestation, and insufficient measures for waste management, which have adverse effects on public health
and overall quality of life. Proactive measures can mitigate many of these risks if Corporate India joins hands
with the Government and influences policy decisions.
Incorporating ERM into the board agenda ensures that risk management is a strategic priority and integral
to decision-making processes, enhancing the board’s ability to navigate uncertainties, capitalize on
opportunities, and steer the organization toward sustainable growth.
Building a Risk intelligent organisation by investing in the right Risk

talent and integrating ERM, ESG, and strategy can pave the way for a
resilient and sustainable organisation. The Board plays a crucial role in
this decision-making process.

21
6. RISK PERCEPTIONS OF INDIA INC
Top Risks
The respondents were asked to rank a total of 11 risks in the short- and medium-terms, with medium term
being specified as a 2-4 years’ timeframe.
6.1 Short-term Risks 6.2 Medium-term Risks

0 20 40 60 80 100 0 20 40 60 80 100
Cyber Security Risk Technology
Microeconomic; e.g. Inflation/

Interest/ Exchange Rates Cyber Security Risk
Microeconomic; e.g. Inflation/

Business Interruption Interest/ Exchange Rates
Technology Business Interruption
Legal/Regulatory Risks Legal/Regulatory Risks
Climate Change / Funding/Investment Risk

Natural Disasters
Climate Change /
Funding/Investment Risk Natural Disasters
Talent Talent
Civil Strife/Geopolitical Issues Civil Strife/

Geopolitical Issues
Pandemics Fire Hazard
Fire Hazard Pandemics
Figures 6.1 and 6.2 show rankings of all risks as rated for short and medium-term, respectively.
The short-term rankings show clear demarcations between the scores of top 3 risks and the scoring
differences blur later on.
The short and medium-term risks can be clustered in to five priorities:
Short Term Medium Term
Technology, Cyber Security,

Priority 1 Cyber Security Risks
Macroeconomic
Priority 2 Macro-economic Risks Business Interruption
Priority 3 Business Interruption Legal/Regulatory Funding
Priority 4 Technology and Legal / Regulatory Risks Climate Change Talent
Climate Change/Natural Disasters Funding/

Priority 5 Civil Strife, Fire Hazard, Pandemics
Investments
Table 6.3: Table depicting top 5 overall short and medium-term risk priorities.

22
If we consider organizations who have overseas presence or JV’s abroad, Climate Risks appear at rank #5,
both in short- and long-term rankings, clearly indicating the visibility of Climate Risks abroad – given various
new regulations in Europe.
The overall risk priorities are derived from perceptions across all participating industry sectors. However,
it is interesting to note sectors which have different priorities when compared with the overall industry
average:
Sector Deviations in Short Term Deviations in Medium Term

Top 3 priorities Top 3 priorities
Climate Change Fire
Energy and Utilities
Climate Change / Natural Disasters
Climate Change / Natural Disasters Climate Change / Natural Disasters
FMCG
Climate Change / Natural Disasters Fire

Hospitality
Civil Strife Climate Change / Natural Disasters
Infrastructure & Climate Change / Natural Disasters Funding and Investments

Real Estate
Civil Strife Talent, Civil Strife
Logistics
No Deviation Funding and Investments

Services
Climate Change / Natural Disasters, Talent
Table 6.4: Sector-wise deviations in risk priorities.
BFSI, Manufacturing, Pharmaceuticals and Technology, Media and Telecommunication sectors top risks
are same as the overall top risks.
Energy and Utilities sector sees Climate Change / Natural Disasters and Fire Hazard in the top risks for
obvious reasons:
l Climate Change and Natural disasters can lead to severe weather events which can create
physical disruptions for Energy and Utility companies
l Weather events can also impact actual energy generation – both positively and negatively
l Governments are pursuing green energy initiatives which can be a risk for companies dependent
upon fossil fuels as well as an opportunity to open new markets
FMCG sector also sees Climate Change / Natural Disasters in top risks due to:
l Supply Chain disruptions can be caused by weather events
l Water supply issues can impact cost and quality of goods
l Transportation and Distribution networks can get disrupted due to catastrophic events
l Regulatory pressures as some FMCG companies are seen to be contributing to environmental
deterioration
Hospitality sector sees Fire as top risk followed by Climate Change / Natural Disasters for reasons:
l Fire is a major threat owing to increased use of electrical appliances and flammable materials
l Climate change can cause business interruptions, property damage, changes in tourism patterns
and regulatory pressures
Logistics sector sees Civil Strife in top risks followed by Talent as it can impact businesses:
l Issues like – Transportation Disruptions, Border / Customs issues, Labor issues, Infrastructure
Damage etc
l Talent requires a diverse range of skills, they need to quickly get trained in digital ways of working –
and companies must also cope up with competition from say e-Commerce companies for the same
talent pool

23
Services organizations see Funding and Investments, Climate Change and Talent in long term top risks.
l Funding risks may arise due to economic downturns which may also impact cash-flows again
adversely impacting investments
l Climate change / Natural Disasters can cause physical infrastructure damage
l Complex talent requirements mean Services sector has to continuously invest in building skills and
at the same time ensure retention of skills and client knowledge
l Supply chain disruptions and Operational difficulties to Services organizations
l Services environment is continuously being digitalised and challenged for higher and higher
efficiency requiring continuous investments and complex talent requirements
The Individual Risks

Cyber security Risk:
The survey indicates cyber security as a major risk by BFSI, logistics and Pharma sectors. An increase in
work-from-home or hybrid models during and post-pandemic exposes the data to potential threats and
data breaches. Organisational systems are facing a significant jump in cyber threats, including ransomware,
extortion ware, malware, phishing attacks, cloud-focused attacks, business email compromise etc.
Customers are also vulnerable to threats by clicking on malicious links and not using strong passwords
though suggested. There is a significant rise in data breaches and respondents continue to see it as a big
threat.
Not only Cyber Security threats but responses to such threats can also cause business interruptions –
for example when an organization decides to shut down its Information Technology (IT) or Operations
Trends in Cyber Claims

Cyber Claims have seen an increasing trend in the past year. A large number of claims
are related to ransomware attacks. These attacks are getting expensive to deal with:
l Costs incurred in managing the attack, forensics, data re-construction and
restoration of systems and services
l Business interruption costs
l Legal costs
Ramneek Goyal
With increasing digital transformation across enterprises across the entire value chain, Vice President –
it is expected that cyber threats will continue to be a top risk for many years to come. Liability
Underwriting & Claims
Given the continuously evolving nature of technology, Enterprises need to regularly
assess their own businesses, processes, technologies, threats and preparedness. Use of strong processes with
latest technology seems to be the most logical approach to fight cyber threats.
Best practices in Cyber Security:

l Clients strengthening backup and recovery systems: with many
companies going for traditional backup methods like off-site tape
storage or alternate data centres.
l Behaviour-based EDR (Endpoint threat Detection and Response
solutions).
l Stronger professional indemnity and limitation of liability clauses.
l Managing relationships with large clients.
For detailed information, please reach out to us at ramneek.goyal@icicilombard.com

24
Technology (OT) servers / networks due to a cyber-attack, most of its services may also shut down. A
successful response strategy requires that Cyber Risk management plan should be an integral part of the
Business Resilience Plan of an organization.
Business Interruption Risk

Loss of business income that businesses sustain due to the necessary suspension of “operations” during
the period of “restoration” is business interruption risk. Some significant risks that result in business
interruption and lost income for months include equipment failure, structure fires, supply chain disruptions,
unplanned power outages, the crime of vandalism, natural disasters like hurricanes, winter storms.
Infrastructure and Real estate, manufacturing and distribution consider Business interruption as the top
long-term risk while Hospitality sector considers it as major short-term risk and long term risk. Business
Interruption risk emerged as top five risks both in short term and long term.
Trends in Property Claims

Property Claims comprising fire, engineering, and miscellaneous, have always seen
many small amount claims: around 90% of the frequency claims account for 7%–8% of
the total claim value in a year, whereas about 4% of severity claims account for 85% of
the total claim value.
Another noteworthy aspect of this category is that Enterprises prefer to transfer
entire risk to the Insurance Company with minimal deductibles. As against that, the
insurance market in the West sees most insurances with large deductibles – implying
self-insurance up to a certain value of the risk.
Mukesh Bansal Catastrophic events, or Nat Cat events, have played a major role in escalating both the
Head – number of claims as well as the value of the claims. Earlier, Nat Cat events were specific
Corporate & SME UW
to geographic zone – but now they seem to be occurring in all zones.
Risk events for enterprises

While enterprises are seen to be learning from risk events and there are
fewer repeat events in this category, some of the best practices can help
enterprises minimize risk events as well as losses from such events:
l Proper planning and identification of all possible risks by doing a
thorough end-to-end technical analysis
l Set up of Standard Operating Procedures for assessment of equipment
health, ensuring timely maintenance and overhauling, ensuring
availability of spares
l Designing and implementing testing strategies for the commissioning phase so that any initial losses can
be identified quickly and their impact can be contained
l Realising that Nat Cat events can happen without warning, understanding the risks they pose, and planning
ahead – even for locations outside of the usual cat event zones—are all important reminders.
A successful claim outcome can be driven by
l Correct declaration of value at risk (sum insured)
l Well-designed systems and processes for identifying and managing risks ensure the availability of accurate
information as and when required
l In the immediate aftermath of any risk event giving rise to a claim, involving the surveyors in the various
decision-making scenarios (like going in for repair or replacement, the specific mode of repair, etc.) will
help the insured in appreciate the coverage’s and limitations of the policy of insurance with regard to their
preferred mode of reinstatement. It is to be noted that not all reinstatement expenses are covered, only
expenses incurred in accordance with policy terms are indemnified.
For detailed information, please reach out to us at mukesh.bansal@icicilombard.com

25
Macroeconomic risk
Weak macroeconomic fundamentals adversely affect institutions due to their exposure to business cycle
conditions. An increase in inflation, interest rates, geopolitical tensions, and currency fluctuations will
continue to impact the industries across sectors.
A rise in inflation and decrease in the growth rate, especially in Europe and United states will impact the
rest of the world. Russians’ invasion of Ukraine and three years of Covid-19 will further add to slow growth.
BFSI perceives macro-economic as top long-term risk while the respondents from Infrastructure and real
estate and logistics perceived it as a major short-term risk.
Legal and Regulatory Risks

Energy and Utilities sector considered legal and regulatory as the top short-term risk and Pharma sector
considers the same as the top long-term risk.
Noncompliance with labour, environmental, intellectual property, tax, safety laws can lead to significant
problems. Results of the survey indicate that Legal and regulatory risk among the top five risks both in terms
of short term and long term. The rise in conscious consumerism and greater awareness of product safety
and ingredients forces manufacturers to present their products as sustainable, ethical, environment friendly,
green, cruelty-free, and more. Failure to disclose the alleged risks and false advertising further increases
the legal risk.
Technology Risk
Technology risks relate to non-adoption of the latest technology. Manufacturing and distribution sector,
Technology sector consider the risk as the top short-term risk. According to the survey, Services sectors
consider the risk as the major long-term risk. Technology emerged as one of the top five risks both in short
term and long term.
Digital transformation and the industry 4.0 vision is the requirement across sectors. Companies must
adapt to new transformation technologies and work on end user device integration, cloud or edge-based
application delivery, high security options, automation, AI and innovative network services. Failing to adapt
to new technology requirements can be a significant threat to companies. Technology is the top long term
risk as per this survey.
Funding / Investment Risk

Funding risk impacts the company’s ability to raise capital under acceptable terms and conditions and
its inability to meet cash flow obligations. Funding risk, if ignored can lead to individual firm failure and
systemic credit risk.
According to the respondents to this survey, funding and investment risk are one of the top five long
term risks for BFSI, Manufacturing and distribution, Infrastructure and Real Estate, Energy and Utilities and
Services.
Climate Change/Natural Disaster

The direct impact of these risks is the loss of property and infrastructure caused by natural calamities
and any consequential losses that may result from these. The indirect costs include compliance and non-
compliance costs since countries are designing and implementing policies in line with global treaties.
The compliance cost is an additional cost and non-compliance has more costs in terms of international
investments, penalties, loss of goodwill and brand, etc.
FMCG sector considered Climate Changes/Natural Disasters as the top long-term risk.
Fire Hazard
National Building Code, State fire prevention and fire safety act & Rules, Factories Act and State Factories
Rules Oil Industry Safety Directorate, and IS Code are a few important regulations and codes in India
related to fire safety and prevention. These regulations have contributed to fire risk reduction.

26
The survey responses mirror this understanding with Fire Hazard getting a low rank both in Short- and
Long-Term rankings. The claim settlement reports of insurance companies show that the value of fire claims
reported is 3.42% of the total value of claims, and the percentage of the number of claims for fire is just
0.104% of the total number of claims in the general insurance, of the major players in the insurance sector
in India, in the year 2023.
Energy and Utilities sector expressed Fire hazards as the major long term risk.
Trends in Property Underwriting

l Earlier, “Global Warming” was a phenomenon and a major risk; now it is “Climate
Change” because the change can manifest as extremes in heat, cold rain, or any
other factor of the climate.
l Natural catastrophes are having an increasing impact on the property insurance
market. The frequency of extreme events such as cyclones, flash floods, and heat
waves is increasing. These events are occurring in unexpected places.
l Organizations are realizing that any premises can get flooded, and business
interruptions can occur at any location. As a result, more and more organizations
Jitendra Singh
are opting for property insurance.
Vice President –
Property Underwriting
l Formerly claims from plants could cover mechanical damage; now they also cover
technical issues resulting from a cyber-attack or ransomware, as more and more
plants are being automated and integrated.
l Changes in workplace design and the use of materials have resulted in fire coverage being purchased by
all industry sectors, including those that were not previously prone to fire risks.
l Supply chain risks must be recognized by insurance
providers. Issues with one supplier could result in issues at
multiple organizations that are part of the supply chain.
l Risk management in Indian companies have improved.
Organizations no longer regard risk management as merely,
a regulatory obligation.
Anticipated Trends
l Increasing insurance penetration
l MSME organisations will also go for extensive insurance
coverage
l More companies will opt for loss-of-profit coverage
l Regulatory changes will ensure that more insurance products are introduced that meet diverse requirements
l Risk mitigation practices can help clients better manage their risks
l Technology will play a bigger role in the sales and servicing of insurance
For detailed information, please reach out to us at jitendra.singh@icicilombard.com

27
Talent
Defining effective talent management as having the right people in place at the right time to drive current
and future business growth.
Risks associated with skill building are capability risk, risk around the retention of capable people, risk
of top talent getting disengaged, unaffordable workforce, risk around compliance related to employee
appointment, retention, and exit.
Talent is expressed among the top five risks in short term by Pharma and FMCG whereas Pharma, Logistics,
Hospitality and Technology sectors mentioned Talent as one of the top 5 long-term risks.
Civil Strife/Geopolitical issues

Geopolitical risk is now seen as the top threat to growth and stability. It is a risk associated with wars,
terrorist acts, and tension. The Geopolitical Risk Index measures the occurrence of impactful geopolitical
events/threats/conflicts by counting the keywords used in the press. A higher geopolitical risk index is
associated with economic disasters and a fall in employment. The current war between Russia and Ukraine
will add to slow growth.
29% of the survey respondents found civil Strife or geopolitical issues to be a risk in the next 2 years.
Hospitality, logistics and services sectors considered the civil and geopolitical risk among the top 5.
Pandemic
Pandemic risk is driven by the combined effects of spark risk (where a pandemic is likely to arise) and
spread risk (how likely it is to diffuse broadly through human populations). The pandemic is perceived as
a risk for which the world is least prepared. Constructive negotiations on the new global pandemic accord
and the International Health Regulations is closely monitored.
Pandemic risk did not emerge among the top 5 short term and long-term risks. However, 22% of the
respondents consider the pandemic as a risk. 11% of these have assigned it a rank 1 risk and 49% have
assigned it a rank 5.
How risks impact business goals?

While ranking of risks tells us which risks businesses find important, it is crucial to understand impact of
these risks on business goals. The IRM and ICICI Lombard survey captured perceptions of impact of various
risks on five generic business goals, namely Customer satisfaction, Growth, Profitability, Innovation and
Reputation.
Business Goal Risks with Highest Impact Risks with Medium Impact Other Risks
Talent
Customer Satisfaction Business Interruption Cybersecurity Macro-economic Funding
Technology Climate Change Legal
Talent
Macro-economic Business Technology Legal /
Growth Cyber Security
Interruption Funding Regulatory Civil Strife/Geo-political
Technology
Macro-economic Business
Profitability Funding / Investment Cyber Security
Interruption Civil Strife/Geo-political
Business Interruption
Talent
Innovation Technology Legal / Regulatory
Cyber Security Funding
Legal / Regulatory Civil Strife /

Reputation Business Interruption
Cyber Security Geo-political Issues
Table 6.5: Risks and Business Goals.

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Customer Satisfaction is impacted most by business interruptions followed by Technology and Cyber
Security risks. FMCG sector polls that Macroeconomic risks can also impact customer satisfaction. In
Services sector, Talent risks can also impact customer satisfaction which is natural given the people-oriented
nature of the sector. Pharma sector also includes Legal/Regulatory risks in its customer satisfaction risks.
Growth and profitability are impacted by a combination of macroeconomic, funding and business interruption
risks. Technology / Media / Telecom sector sees Legal / Regulatory risks impacting the Growth as new
capacities and capabilities could be controlled by legal and regulatory factors. Hospitality and Energy
sectors find Business Interruption risks can also impact Growth.
Innovation is impacted by Technology, Cyber and Talent risks which are the three key inputs to innovation.
Pharma sector sees funding risks impacting innovation as new drug research and trials can be capital
intensive activities.
Reputation is impacted by Legal / Regulatory, Cyber Security and Business Interruption risks.
Changes in the risk perception in last two years

Figure 6.6 captures perceptions of respondents on how the risks have changed over last 2 years. The
question allowed respondents to select out of options Decreased a lot, Decreased somewhat, No Change,
Increased somewhat and Increased a lot. The responses were analysed to determine how risks changed.
The senior professionals across industries perceive that cyber security risks increased the most during the
last two years while Fire Hazards as a risk remained at the same level as it was earlier.
Increased a lot
Increased
somewhat
No Change
Cybersecurity Technology Macroeconomic, Climate Talent Civil strife/ Legal/ Fundng/ Business Pandemics Fire
Risks e.g. inflation/ change/ Geopolitical Regulatory Investment Interruption Hazards
interest/ Exchange Natural issues Risk Rates
rates disasters
Figure 6.6: The above figure captures the changing risk perception over last two years.
Logistics sector perceives that all risks have increased, with Cyber Security and Macroeconomic risks
having increased a lot.
Many respondents across the sectors perceive Pandemic and Business Interruption Risks have reduced.
Several respondents also felt that Fire Hazard risks have reduced over the last two years. This could be
attributed to better compliance with regulations and improved safety environments across organizations.
There is also a surprising minority which feels that Climate Change risks have reduced some what over the
last two years.
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Low High
Energy and Utilities 6.3
Infrastructure & Real Estate 6.2
Other 6
Pharma 5.8
Technology / Media / 5.3

Telecommunications
Services 5.2
Manufacturing & Distribution 5.1
BFSI 5
Logistics 4.8
Hospitality 4.5
FMCG 4.2
Average Industry Perception 5.3
Figure 6.7: How risky is the overall environment.
Perception of Total Risk

While risk ranking and changes to risks tell us how respondents perceive individual risks, the survey had
a question about “..perception of total risk your organisation will face over the next two years”. The goal
of asking this question was to get a qualitative idea of how risky the respondents perceive the overall
business environment to be – 0 being low risk to 10 being high risk.
The overall perception seems to be of a moderately risky business environment.
On a sector basis, perception of the average risk level of Energy and Utilities is high compared to other
sectors. India’s domestic production of oil and gas is less than its consumption. A significant increase in
demand of energy, oil, coal, residential energy usage, car ownership, two-wheeler owner ship and Co2
emissions is witnessed because of the country’s population.
FMCG sector has the least risk due to increase in consumption and the impact of rise in population on
growth of the sector cannot be ignored.
Organizations are realizing that any premise can get flooded, business
interruptions can occur at any location: as a result more and more
organizations are opting for property insurance.

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About Reliance Jio

Reliance Jio has built a world- class all-IP data strong future proof
network with 4G LTE technology. The network is 5G ready with no legacy
infrastructure and indigenous 5G stack. It is the only network conceived as
a Mobile Video Network from the ground up. It is future ready and can be
easily upgraded to support even more data, as technologies advance on
to 6G and beyond.
Jio has brought transformational changes in the Indian digital services
space to enable the vision of Digital India for 1.3 billion Indians and propel
India into global leadership in the digital economy. It has created an eco- Mr. Sachin Mutha
system comprising of network, devices, applications and content, service Head Risk Management
experience and affordable tariffs for everyone to live the Jio Digital Life. Reliance Jio & Media Companies
Knowledge Partner –
Risk Management IRM India Affiliate
During the past few years, geo-political and pandemic risks have continued creating a negative impact on
supply chain, inflation, currency, interest rates and health safety. In addition, climate related changes and natural
calamities occurrences also has its impact on the operations and organizational assets. These challenges are
faced by nearly every company, leading to a rethink of strategies to a new operating environment for mitigation
of such risks.
Jio believes in proactive identification and mitigation of potential risks. These risks need to be managed to
protect its customers, employees, shareholders, and other stakeholders in the society. Risk and opportunity
management is therefore key element of Jio Risk Management Strategy.
Use of Insurance as a Risk Management Solution

Insurance is a common tool used for risk management across the world, and it plays a crucial role in Jio as well.
Insurance is used to transfer some of the financial risks to the insurance companies. Here’s broad note on the
use of insurance in our risk mitigation strategy.
1. Property and Casualty Insurance: Jio has extensive critical infrastructure and network assets that is spread
across India and abroad as well. These assets need to be safeguarded for loss due or physical damages due
to perils such as riots, vandalism, natural disasters, and accidents. Jio has taken comprehensive coverage
via Cellular Network Policy to manage such risks. This is a customized all risk policy for Telecommunication
sector in India.
2. Employee Benefits: Jio has taken comprehensive employee benefits polices in the form of Health, Life
Insurance and Personal Accident covering all its employees. This helps employees manage medical
expenses and provides a safety net in case of health-related issues to self as well as family.
3. Supply Chain Insurance: Jio has comprehensive supply chain management requirements for domestic and
international transits. These includes Imports and domestic movements of network assets and devices.
Insurance coverage includes any losses such as accidents, theft, pilferage etc. during transit and storage.
4. Directors and officers (D&O) insurance to protect the directors and officers from liabilities resulting from
legal action against them for alleged wrongful acts in their managerial capacity including legal costs.
5. Commercial General Liability for coverage of third-party property damage or bodily injury including legal
cost.
6. We also insist on all our vendor or partners to obtain Workmen Compensation policy as part of risk mitigation
for any workplace related accidents.
7. Cyber Insurance : We are exploring Cyber insurance coverage considering our large digital ecosystem and
introduction of the Digital Personal Data Protection Bill, 2023. It should help to manage the financial impact
of data breaches, cyberattacks, and other cybersecurity incidents.

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7. PREPAREDNESS TO FACE RISKS IN INDIA INC.
This section presents analysis of enterprise risk management Maturity and preparedness of
organizations to face specific risks.
Risk Management Maturity

Maturity models are commonly used across disciplines to build a consensus on the terminology for
maturity in a certain area and to help organizations chart out their improvement plans by assessing their
own maturity and deciding target maturity levels for themselves.
We have combined several aspects of ERM practices to create a Risk Management Maturity (RMM) model.
Level 4 Transforming
High levels of maturity across all areas
Level 3 Progressing
Significantly high level of maturity across
multiple areas of ERM
Level 2 Emerging
Inconsistent implementation of certain risk
management practices
Level 1 Beginner
Organizations whose ERM practices
are at an initial stage
Figure 7.1. Risk Management Maturity (RMM) model.
Based on responses received, we have derived a RMM profile of the respondents. Organizational maturity
has been assessed at four levels:
50.0%
45.0%
40.0%
35.0%
30.0%
25.0%
20.0%
15.0%
10.0%
5.0%
0.0%
Beginner Emerging Progressing Transforming
Figure 7.2. Risk Management Maturity (RMM) profile, depicting the organizational maturity of the survey respondents.
Companies with overseas subsidiaries show significantly higher levels of maturity with more than 25%
responses indicating Transforming level.
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The RMM assessment is based on various aspects such as organizational processes, practices and culture,
discussed in detail in the following sub-sections. To be at Level 4 – Transforming, an organization needs to
be at 3 or higher for most of the areas. While just over 10% organizations have reached this level, a lot of
organizations have reached level 4 in one or more individual practices, as will be evident in the subsequent
analysis. Organizations need to ensure uniformity and consistency of processes, technology and culture
across all areas of risk management maturity.
Risk Identification Practices
Risk Identification skills, processes and practices are crucial for successful risk management effort.
Mature organizations ensure wide and deep participation in Risk Identification endeavour. They deploy
a combination of business knowledge, risk knowledge and context awareness to identify relevant risks
in time. Ability to identify black swans and grey rhinos and treating them adequately plays a big role in
sustained success of the organization.
Risk Identification
40%
35%
30%
25%
20%
15%
10%
5%
0%
Done by the Board Done by Risk Department Done by Risk Champions Relevant employees with
the help of Risk Champions
Figure 7.3. Risk identification practices shown by the respondent companies, in increasing order of maturity.
As per responses to the survey, about 40% organizations have a high maturity in this area with identification
being done by relevant employees or by risk champions. However, around 60% respondents indicate risk
identification being done either at the Board level or by the Risk Department.
It is interesting to note that smaller organizations show better response to this question. If we take
organizations below Rs 10,000 Cr revenue, more than 30% companies respond to risk identification being
done by relevant employees with the help of risk champions, which is a level identification being done by
relevant employees with the help of risk champions, which is a level 4 practice. Amongst organizations
with revenues above Rs 10,000 Cr, around 49% responses point to risk identification being done by Risk
Department, which is a level 2 practice.
The overall results indicate a need for improving risk identification processes and skills across the
organization.
Risk Management Processes

Properly designed processes, aligned with organizational goals and context, supported by appropriate
information systems and leadership at all levels is the backbone of a successful risk management effort.
The processes must be ingrained into the organization at all levels – possibly becoming components
of all business processes. Apart from process definition, implementation of the processes is even more
important and so is a continuous improvement cycle.

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40% Risk Management Processes
35%
30%
25%
20%
15%
10%
5%
0%
Part of Audit / Risk Department Implemented across the Also embedded in routine
Control owns and executes organization business processes
Figure 7.4. Risk Management Processes adapted by the respondent companies, in increasing order of maturity.
About 54% companies have a higher maturity in this area with risk management process either being
implemented across the organization or it being embedded in routine business. However, there are 46%
organizations who have restricted Risk Management process to Audit / Control / Risk Department. Larger
organizations have shown higher maturity in this area.
Risk Management Information:

High quality information is the lifeblood of any system and Risk Management is no exception. There
needs to be a clear understanding of what information is needed, when, by whom and at what accuracy.
This then needs to be implemented across the organization to ensure that the right people get the right
information at the right time. In the digital world, real time online information with ease of access to all
relevant stakeholders is the need of the hour.
Risk Management Information

40%
35%
30%
25%
20%
15%
10%
5%
0%
Created as and Real Time information with Real Time information Information sharing across
when needed Risk Department available to all the organization
Departments
Figure 7.5. Risk Management information preference, by the respondent companies in increasing order of maturity.
More than 60% respondents have shown higher levels of maturity with either real time information being
available to all departments or sharing of information across the organization. This would indicate the status
of defining which information is useful, capturing the information and then analysing and sharing it across
the organization so that people have access to relevant real time information.
In this area as well, companies with subsidiaries overseas have slightly high maturity, with about 50% of
responses pointing to Level 4- or Information sharing across the organization.

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Talent for Risk Management

Availability of Risk skills across the organization is essential for establishing and executing the processes
in the right spirit. Investing in the right level of skills for Risk Management department is the starting point.
Risk skills need to be available right from the board level to the front-line staff. Best way to do this is to make
sure risk skills are covered in every job description and are diligently used while recruiting, training and
promoting people across the organization.
40% Talent for Risk Management
30%
25%
20%
15%
10%
5%
0%
Discussed on a Planned for Talent requirements Part of job description;
need basis Risk Department defined for all regular skill upgrade
departments
Figure 7.6. Talent for Risk Management, as defined by the respondent companies, in increasing order of maturity.
About 55% responses show higher levels of maturity with talent requirements defined across all departments
and risk skills being part of job descriptions. About 45% respondents have a tactical approach towards Risk
talent. In organizations with revenues over Rs 10,000 Cr, around 35% responses point to risk skills being
part of job descriptions which is the highest maturity level.
Risk Attitude:
Apart from the tangible characteristics like skills, processes and technology, culture plays an important role
in successful management of risks. Attitudes of people influence their behaviours and behaviours influence
the culture. Thus organization risk attitude is a good pointer towards the resultant culture.
45%
40% Risk Attitude
35%
30%
25%
20%
15%
10%
5%
0%
Risks are Risks need Risks can Risk Management capability
to be avoided to be managed be positive is a competitive advantage
Figure 7.7. Risk Attitude of the respondent companies, in increasing order of maturity.
Over 50% responses show high maturity levels in this area. Over 40% consider risk management capability
to be competitive advantage, the highest maturity for Risk Attitude. On the other hand, around 49%
respondents consider risk as something negative, only to be avoided or just to be managed. Improvement
of Risk Attitude is a crucial exercise that has to begin at the top.

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Improving Risk Management Maturity

Highest number of respondents chose improving Risk Identification skills among employees as an
investment area. Effective Risk Identification requires not only a 360-degree view of business and context
but also creativity, teamwork and a proper culture that encourages flow of risk information.
The next largest improvement area is risk management processes and consistency across the organization.
This is extremely important as a risk may involve multiple business processes across multiple departments.
Inconsistent risk process definitions or implementation could result in increasing the risk severity and
probability.
Risk Technology plays an important part. In today’s digital world appropriate technology can be deployed
not just in managing risk information in the organization but also in risk identification and controls design.
ERM Investments
0% 10% 20% 30% 40% 50% 60%
Developing or Improving risk
identification skills among employees
Improve Risk Mangement Process consistency and

collaboration across the organization
Developing or Improving Risk

Managment Technology
Benchmarking Risk Mangement Process with
international standards
Developing or Improving control designs
Integrating ESG with ERM
Hire more qualified Risk Management employees

or external experts
Figure 7.8. ERM Investments made by the respondent companies, in increasing order of maturity.
Around 43% percentage of respondents intend to benchmark their ERM Practices against international
standards. This goes up to 50% if we focus on organizations with subsidiaries outside India. Over 33%
organizations plan on integrating ERM with ESG (Environment, Social and Governance) efforts – which will
help organizations have a unified and consistent approach towards all risks. This goes up to 45% if we focus
on organizations with subsidiaries overseas.
Factors enhancing the risk performance

While a higher risk management maturity builds the organization capability, there are several other factors
which help in sustaining the maturity and translating the capability to performance. These factors are:
Effective Risk Identification requires not only a 360-degree view

of business and context but also creativity, teamwork and a proper
culture that encourages flow of risk information.

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Risk Management Standards Used

Standard Risk Management Implemented
ISO 31000 – 2018 and COSO-2017 Risk Management
Standards provide a basis for establishing risk
management practices in an organization. These 31.58%
standards cover the entire business cycle – from
strategy to execution and the entire risk management
cycle within the business cycle. Following a standard
would ensure a robust risk management system 57.02%
covering all areas. These standards are also updated
from time to time – and keeping in line with the
updated standards is the easiest way to keep the risk 11.40%
management processes relevant.
Over 57% responses indicate that risk management No specific standard
processes are not based on any specific standard like ISO 31000/2018
ISO 31000 or COSO 2017. This goes down to 33% if COSO 2017
we consider organizations which are subsidiaries of
overseas companies or which have JV’s overseas. Figure 7.9. A chart showing implementation of standard
risk management practice.
Organizations which do not use a standard for their
Risk Management system may miss out on crucial
aspects of risk management process or its implementation.
Independence of Risk Management Function

Another interesting question is regarding independence of Risk Management function. Risk Management
function needs to be able to participate and raise risk issues across all areas of an organization. At the
same time, they need to be able to involve all areas in identification, evaluation and mitigation of risks. For
the Risk Management function to perform their role effectively, they need to be – and also be seen as – an
independent function.
Who does Risk Management Report to
3.51%
2.63% 0.88%
7.02%
18.42%
49.12%
16.67%
1.75%
Risk Management Committee COO CEO CPO

of the Board of Directors
General Counsel / Head of Other CRO
CFO Legal & Regulatory Affairs
Figure 7.10. A pie chart depicting risk management reporting at organisational level.

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The question has resulted in wide range of answers. Only 3.5% respondents have their risk function
reporting to the CEO. A small fraction has chosen CRO, with the moot question being who does the CRO
report to. Around 35% respondents indicate risk management function reporting into COO or CFO, thereby
diluting the independence of the function. However, around 49% response indicate “Reporting to Risk
Management Committee”, implying a high level of independence of risk management function.
Risk Preparedness: Capabilities and Investments

This part of the survey focuses on how well prepared organizations are to manage the risks. For each risk
we asked respondents whether they
– have a strategy to manage it
– have invested in managing the risk
– have inhouse expertise in the field
– are looking for external expertise
The table below shows risk preparedness for various risks listed as per their short term ranking.
Risk Have a Have Have Inhouse Prepared Looking for

strategy invested in expertise in all three external
aspects expertise
Cybersecurity Risks 47% 56% 54% 33% 35%
Macroeconomic; e.g. Inflation / Interest / 42% 31% 36% 18% 20%

Exchange Rates
Business Interruption 55% 48% 53% 29% 20%
Technology 39% 54% 46% 26% 25%
Legal / Regulatory Risks 42% 43% 53% 26% 25%
Climate change / Natural Disasters 30% 29% 21% 14% 33%
Funding / Investment Risks 40% 32% 45% 16% 11%
Talent 32% 34% 36% 19% 6%
Civil Strife / Geopolitical issues 18% 14% 12% 9% 25%
Pandemics 25% 14% 16% 9% 17%
Fire Hazard 35% 32% 29% 18% 9%
Table 7.11. The table depicts short term risk preparedness for listed risks.
Organizations need to take a wholistic approach towards preparing for risks – have a strategy that is
aligned to the business goal and environment, ensure availability of expertise and invest in identifying risks
and putting mitigation measures in place.
When we look at intent to engage external expertise, Cyber Security ranks first which is in line with the top
rank of cyber security in risk rankings as well as increasing complexity of the subject. The next target for
external expert engagement is Climate Change, which indicates increasing awareness of climate risks and
will get translated into action in the near future.
... make sure risk skills are covered in every job description and
are diligently used while recruiting, training and promoting people
across the organization.

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8. RISK MANAGEMENT AND INSURANCE
Risk Insurance Survey
What kind of risk management solutions do organizations deploy
Respondents were asked to select which risk management solutions they deploy for various risks: options
being None, Non-insurance, Insurance, Both. This question attempted to find out how industry combines
insurance and non-insurance solutions for managing specific risks. The results are shown in table below.
Solutions
Risks Insurance Non-Insurance Both None
Business Interruption 24% 6% 51% 19%
Legal / Regulatory Risks 14% 16% 43% 27%
Technology 10% 17% 38% 36%
Talent 6% 33% 19% 41%
Cybersecurity Risks 14% 10% 48% 28%
Climate Change / Natural Disasters 20% 13% 32% 34%
Civil Strife / Geopolitical Issues 15% 16% 32% 38%
Fire Hazard 32% 0% 44% 25%
Pandemics 13% 12% 36% 39%
Figure 8.1: The table depicts the insurable and non insurable solutions deployed to manage the risks.
The response to the opted insurable and non-insurable risk solutions of the respondents, are indicated
below:
l Organizations need to start planning and implementing proper solutions and programs in to manage
Talent, Civil Strife, Technology and Pandemic risks.
l Organizations need to evaluate use of Insurance as a solution to manage a wide range of risks
Organizations need to evaluate use of Insurance as a solution to

manage a wide range of risks.

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Decision factors for Insurance Solution

Respondents were asked on relative importance of factors which lead to selection of Insurance as a solution
(multiple answers were allowed). The responses are shown in Figure 8.2.
Factors influencing Selection of Insurance as a Solution

0 20 40 60 80 100
Premium Cost
Risk Impact Level
Product Features
Contractual / Regulatory requirements
Credit Rating of the insurer
Ease of doing business
Figure 8.2: Depicts the factors influencing selection of Insurance as a solution
Insurance solutions are considered only when Risk Impact levels are assessed to be High. For such risks,
Premium Cost seems to the factor with the highest weight in selecting the Insurance solution, followed by
the product features and other factors.
Measuring Total Cost of Insuring Risk
The Total Cost of Insuring Risk (TCOIR) is defined as sum of internal and external costs of managing risk,
cost of retaining risk and cost of transferring the risk. We asked respondents whether they were measuring
costs of insuring risks and if yes which parts they were measuring (multiple answers were allowed).
What Factors of TCOIR do you measure
Risk Transfer 50.9%
External Risk Management 36.0%
Internal Risk Management 34.2%
Risk Retention 30.7%
Do not measure TOCIR 22.8%
Figure 8.3. Figure depicting top parameters factored in while measuring total cost of insuring risks.
Maximum number of respondents, over 50%, measure the costs of Risk Transfer which would be cost
of premiums paid and costs related to managing insurance process. Just over 30% measure cost of risk
retention.

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How many TCOIR factors do you measure

40%
35%
30%
25%
20%
15%
10%
5%
0% 0 1 2 3 4
Figure 8.4.Figure depicts the total number of parameters evaluated while measuring the cost of insuring the risk.
On the other hand, we also tried to find out how many parameters related to Total Cost Of Insuring Risk
(TCOIR) are measured – it turns out that roughly 40% do not measure any factor at all whereas just about
6% measure all four parameters. This indicates that the processes and practices related to managing risks
using Insurance products need to improve.
Additional Services
Respondents’ preference for additional services they expect from Insurance providers (multiple answers
were allowed), is given in figure 8.5.
Additional Services desired from Insurance Providers
Risk benchmarking for leading industry sectors 57.89%
Claims analysis and learnings from claims 57.89%
Risk audits and Mitigation Solutions 49.12%
Crisis management / recovery services 37.72%
Education and networking services 26.32%
Figure 8.5.: Depicts the top additional services expected from insurance providers by the survey respondents.
Largest number of respondents were desirous of benchmarking their Risk Management practices and in
getting insights from analysis of claims. These would help organizations improve their Risk Management
practices in a focused way and improve their Insurance outcomes thru better claims settlement results.
Risk Audits and mitigation Solutions would help companies find out their areas of improvements both in
processes as well as in Risk Mitigation solutions. Managing Crises and recovering from them are also quite
popular demands.

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Improvements expected from Insurance Providers
The final set of questions asked respondents what improvements they would like to see from their insurance
providers in terms of products and experiences.
Desired Products Improvements
0 20 40 60
Assistance with selecting right coverage
Pricing
Policy Customization
Availability of products fitting your needs
Clarity of policy coverage and terms
Number of respondents
Figure 8.6.: Table charting out the desired improvements in the Insurance products.
Desired Experience Improvements

0 20 40 60
Claims process
Communication throughout the policy term
Customer support
Onboarding
Technology
Account management
Number of respondents
Figure 8.7.: Table charting out the desired improvements in the Insurance products.
While respondents vote almost equally for all product areas to be improved, the largest number of votes
go to improvements in Claims Process when talking about overall experience. The next rank goes to the
desire for communication throughout the policy term. In a matching comment, Claims experts also say that
“constant communication during the claim process – starting right at the moment when a loss has occurred,
will ensure smooth claim settlement”.

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An analysis of publicly available claims data

Analysis of insurance claims filed by businesses over the years helps us analyse on how risk profiles have
changed during that period.
We have based our analysis on NL-37 (Claims Data) forms filed by general insurance companies with
Insurance Regulatory and Development Authority of India (IRDAI).
To create an industry-wide report that accurately reflects the changing insurance landscape for businesses,
we have gathered the data of top 13 insurance companies and focused on only 4 commercial line insurance
products sold to businesses. Out of the 19 different categories listed in the NL5 and NL37 forms, we have
selected 4 insurance categories for this analysis as can be seen in Table 1.
Table below provides an overview of the total number of claims settled by top 13 insurance companies,
for these 4 categories over the last 5 years.
Sum of Number of Claims Settled
FY2018-19 FY2019-20 FY2020 FY2021 FY2022 FY2023 Grand Total
Engineering 57,059 72,371 86,081 81,704 65,379 53,670 4,16,264
Fire 45,337 61,303 59,351 85,779 64,502 54,575 3,70,847
Liability*# 13,755 15,157 14,053 11,895 19,493 18,632 92,985
Marine Cargo 2,31,981 2,83,903 2,36,349 2,24,411 2,91,698 3,35,865 16,04,207
Grand Total 3,48,132 4,32,734 3,95,834 4,03,789 4,41,072 4,62,742 24,84,303
Table 8.7: Overview of number of claims settled for four commercial line insurance products of Top 13 companies.
*Liability category calculation includes Workmen’s compensation/Employer’s liability and Public/Product Liability claims.
#Liability as a category was dropped after FY 2021 in the reporting format and Public/Product Liability was introduced. Public/Product
Liability heading along with other items were reported seperately from FY 2022 onwards.
Source: NL-37 uploaded by Top 13 General Insurance companies on their respective websites.
Fire Insurance
Fire
100,000
94,131
82,333
80,000
65,281
67,041
60,000 62,416
40,000
20,000
FY2019 FY2020 FY2021 FY2022 FY2023
Figure 8.8: Trend line depicting total number of fire claims over last 5 years.
Source: NL-37 uploaded by Top 13 General Insurance companies on their respective websites, consolidated for Fire LOB.

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Fire insurance claims saw an increase in the last few years. Through our conversation with industry experts,
we understood that adverse effects of climate change have played a significant role in the escalation of fire
insurance claims. Additionally, in 2022, the country experienced the highest number of heat wave days in a
decade, with 280 heat wave days recorded across 16 states – the highest tally in 12 years. The combination
of dry air and soaring temperatures created favourable conditions for the ignition and rapid spread of fires.
The heightened frequency and intensity of heat waves significantly increased the vulnerability of various
environments to fire outbreaks. This increased vulnerability to fire accidents necessitated greater reliance
on fire insurance coverage and subsequent claims.
The increasing awareness also means that businesses are taking greater precautions against fire accidents.
They are being assisted on this front by insurance companies who are able to provide them with inputs on
how to minimise the chance of fire accidents and subsequent disruptions.
Trends in Liability Claims

Employment Practices Liability
Claims related to racial/gender discrimination and sexual harassment have been
rising from 10% to 15% year over year. Such risk events are global in nature and
involve legal and settlement costs. It has been observed that legal costs are far
higher than the actual settlement costs, given that lawyer fees have seen a steep
increase.
Ramneek Goyal
Commercial General Liability Vice President –
This category has seen an increase in claims, most of which are connected to Liability
Underwriting & Claims
product recalls or flaws.
Directors and Officers Liability

The number of claims in this category has seen a downward trend. Also, given the fact that these events can
impact corporate reputation, only “need to know” information is disclosed. In cases where settlement costs
are low, companies often withdraw claim notices and handle settlements independently to reduce disclosures.
Technical Errors and Omissions Claims

E&O claims have recently seen an increasing trend.
Earlier, the trend was that affected entities would notify
potential disputes but would rarely file an actual claim. This
is changing due to an increase in contract terminations
on account of time, capability, and skill issues. While the
frequency of claims is not high, the severity is. These can
occasionally lead to class action lawsuits that, usually in the
pharmaceutical industry, result in large settlements.
Other areas with increasing claims trends are Crime Policy

focusing on –
l6 Employee fraud
l6 Social Engineering / Phishing
l6 Loss of Fee cover
l6 Copyright related policies
For detailed information, please reach out to us at ramneek.goyal@icicilombard.com

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Marine Cargo Insurance
Marine Cargo
400,000 364,854
350,000
293,755 310,180
300,000
247,555
250,000 239,688
100,000
FY2019 FY2020 FY2021 FY2022 FY2023
Figure 8.9: Trend line depicting total number of Marine cargo claims over last 5 years.
Source: NL-37 uploaded by Top 13 General Insurance companies on their respective websites, consolidated for Marine LOB.
The expansion of import-export activities in India, particularly with the increasing push of the Government of
India to “Make in India”, has seen an increase in the amount of cross-border trade of goods. This increased
push to make India the manufacturing capital of the world had an impact on the marine cargo insurance as well.
Trends in Marine Claims

Marine Claims include claims from domestic and international transportation of
cargo using multiple modes of transportation, such as trucks, railways, airlines,
and ships.
Cause of Loss incidents

l Mishaps during loading/unloading
l Accidents during transportation
Sujoy Maitra
l Damage due to rains can be severe in case of Marine
cargo like cement or coal
l Theft
l Hijacking/Robberies
l Fire damage due to hazardous goods such as
batteries
l Misplacement of packages / Cargo
l Catastrophic events and natural disasters
Major developments
l Consignment values are increasing; the same cargo has a higher value due to inflation
l Business mix change: due to e-commerce, all kinds of things are being shipped.
As a step to risk reduction, companies should

l Improve the risk management process for transportation using a multi-disciplinary team
representing all stakeholders
l Selection of carriers based on the needs, carriers’ capabilities, and track record
l Proper packaging design
l Due diligence in loading and unloading processes and sites
l Safeguard proper driver verification in the case of truck transportation
l Ensure proper fixtures, safety harnesses, and devices depending on the consignment.
For detailed information, please reach out to us at sujoy.maitra@icicilombard.com

45
Furthermore, the expansion of India’s e-commerce sector has significantly contributed to the increased
demand for marine cargo insurance across all modes of transportation. According to a Statista report, the
country boasted 185 million online consumers in 2021, a number projected to soar to 425 million by 2027.
With an average of 10 orders placed per client annually, the e-commerce sector has emerged as a key
driver of import and export activities. E-commerce platforms heavily rely on the efficient movement of goods
not only through sea transportation but also through road, rail, and air transport. As a result, the need for
comprehensive marine cargo insurance coverage extends to safeguarding cargo during transit across
multiple modes of transportation.
Engineering Insurance
Engineering
100,000
87,812
85,593
80,000
68,845
73,348
60,000
56,566
40,000
20,000
FY2019 FY2020 FY2021 FY2022 FY2023
Figure 8.10.: Trend line depicting total number of Engineering claims over last 5 years.
Source: NL-37 uploaded by Top 13 General Insurance companies on their respective websites, consolidated for Engineering LOB.
The Indian government has placed a high priority on enhancing the nation’s infrastructure to better serve
its burgeoning economy and it aspires for India to become a fully developed nation by 2047. With a firm
commitment to propel the country’s growth trajectory, the Indian government has identified a range of
upcoming infrastructure projects deemed critical to the nation’s advancement.
The focus of the government on Infrastructure has led to good growth in engineering line of business,
we have seen multiple projects on roads, railways electrification green energy as well as irrigation and
water pipeline projects. Corporate India has started to focus on manufacturing capacity expansion, we are
seeing investment happening in energy, steel and cement sectors. The landscape of large engineering and
construction projects has undergone a remarkable metamorphosis in recent years, leading to unprecedented
scale, higher values, and increased complexity. These endeavours have evolved to become colossal
undertakings, often entailing immense financial investments, with the largest ventures valued in the tens
of billions of rupees. The timelines for these projects have expanded substantially, spanning not just years
but sometimes even decades. Moreover, the incorporation of advanced technology and sophisticated
machinery in factories and offices has led to a substantial increase in the monetary value per square meter
of these sites.Consequently, the sums insured for these projects have also witnessed a significant increase,
reflecting the heightened value and scale of modern construction sites. As a direct consequence, any
potential loss incurred during the project’s lifecycle is now much more likely to have a larger and more
substantial impact, underscoring the critical importance of comprehensive risk management and insurance
coverage to safeguard against potential financial setbacks.
The above analyses has shown that there has been an increase in awareness amongst customers about
several of the insurance products to cover their risks. It can be seen that government programmes and
policies have a significant impact on the insurance sector.
Similarly, the “Make in India” policy meant that there is an increase in trade value which is being reflected
in the marine cargo insurance.
Finally, the Government’s push to improve infrastructure also meant that there is a corresponding increase
in the Engineering insurance products used by businesses.

46
APPENDIX I: SURVEY METHODOLOGY
Methodology and Statistics

Basis of the report is a survey of senior industry representatives seeking responses to 28 questions spread
across 4 sections:
l Section 1 Demographics : 6 questions
l Section 2 Top Risks : 7 questions
l Section 3 Enterprise Risk Management Practices : 9 questions
l Section 4 Risk Management and Insurance : 6 questions
The survey was launched in May 2023 and responses collected by June 2023.
Analysis and interpretation of the survey data was further enhanced by using inputs from multiple sources
such as:
l Claims reports filed by Insurance companies with IRDAI
l Risks Reports from sources like World Economic Forum, RBI Systemic Survey, Eurasia Group
l Study of risks declared by 20 global companies across industry sectors in their annual reports or
Form-10K filings as required by US SEC
l Study of risks declared by 20 Indian companies across sectors in their annual reports
Inputs on contemporary Indian scenarios were obtained as expert views from Industry Risk Experts and
Claims/Underwriting Experts of ICICI Lombard.
Participant Demographics
The important demographic factors from the point of view of risk are the respondent’s industry, the revenue
size of the entity, the age of the entity and the geographical spread of the entity.
Our respondent profile includes a diverse industry sector representation with major number of
respondents coming from BFSI, Manufacturing and Distribution, Technology Media and Telecom, Services,
and Energy and Utilities and Pharma sectors.
3.5%
13.2%
28.9%
8.8%
4.4%
7.0%
4.4%
18.4%
1.8%
5.3%
4.4%
BFSI FMCG Infrastructure Manufacturing Services Other

and Real Estate and Distribution
Energy Utilities Hospitality Technology/Media/
Logistics Pharma Telecommunications

47
Over 40% of the respondents represented companies with revenues of Rs 10,000 Crore or more per year. Rest
of the categories were evenly represented in the rest of the sample size.
In terms of geographical spread, just over 50% companies operate only within India. About 33% respondents
have subsidiaries overseas and 13% organizations are subsidiaries of overseas companies. Just over 2%
respondents have JV’s overseas.
Geographical Spread
Size of the firm by revenue
2.63%
19.30% 20.18%
50.88%
33.33%
17.54%
42.98%
13.16%
INR 10000 crores per annum or more

Operate within India
Between INR 500 crores and INR 1999 crores
per annum We have subsidiaries overseas
text to be checked in word file We are the subsidiary of an overseas parent company
Less than INR 500 crores per annum We have JVs overseas
In terms of organizational lifespan, more than 57% companies are more than 20 years old and just over
12% are less than 5 years old.
In terms of seniority of respondents, we have a balanced mix representing managers, Vice Presidents,
CXO and board members.
Respondent Designation
Organizational Lifespan
3%
12.28%
23%
35%
57.89%
29.82%
39%
VP
More than 20 years
Manager
5 to 20 years
CXO
Less than 5 years
Board Member

48
APPENDIX II: REFERENCES
1. World Economic Forum, January 2023. The Global Risks Report 2023.
{WEF_Global_Risks_Report_2023.pdf (weforum.org)}
2. Mark Beasley, Bruce Branson and Don Pagach, January 4, 2023. An Evolving Risk Landscape:
Insights from a Decade of Surveys of Executives and Risk Professionals.
{https://www.mdpi.com/1911-8074/16/1/29}.
3. Ian Bremmer & Cliff Kupchan, January 2023. Eurasia Group: Top Risks 2023.
{eurasiagroup_toprisks2023.pdf }.
4. Reserve Bank of India, 2018, 2019, 2020, 2021, 2022, 2023. Systemic Risk Surveys.
{https://www.rbi.org.in/Scripts/PublicationReportDetails.aspx?UrlPage=&ID=1211}.
5. World Bank, January 2023. Global Economic Prospects. {http://hdl.handle.net/10986/38030}.
6. International Monetary Fund, April 2023. World Economic Outlook, A Rocky Recovery.
{https://www.imf.org/en/Publications/WEO/Issues/2023/04/11/world-economic-outlook-april-2023}.
7. Morgan Stanley, November 2022. India Economic Boom: 2031 Growth Outlook.
{https://www.morganstanley.com/ideas/investment-opportunities-in-india}.
8. Rajiv Biswas. India’s GDP growth remains buoyant in 2023, September 2023.
{https://www.spglobal.com/marketintelligence/en/mi/research-analysis/indias-gdp-growth-remains-
buoyant-in-2023-sep23.html}.
Disclaimer
The documents, statements and/or calculations used by ICICI Lombard General Insurance Company Limited (“ICIC Lombard)” and
Institute of Risk Management (IRM) India Affiliate (Herein referred to as “We”) are based on survey conducted for independent
companies of multiple sectors, and available public source from public source, as general information. The outcome of risk analysis
reproduced in this report, including any enclosures and attachments, is intended to raise general awareness about the need for
a better risk management and mitigation based on standard practices and shall not be deemed as instruction for any specific risk
without subsequent independent analysis, evaluation, verification, and assessment of appropriateness.
We are not responsible for any errors or omissions or for the results obtained from the use of such information. We do not make
representations or warranties, either express or implied, of any kind with respect to the third party, its actions, content, information
or data. We do not represent or endorse the accuracy or reliability of any advice, opinion, statement, or other information provided
for the purpose of rendering services hereunder. User/s acknowledge/s that any reliance upon such opinion, advice, statement,
memorandum or information shall be at his/her/their sole risk. Any such person or entity should seek advice based on the particular
circumstances from the experts of the respective field arenas. The content of this report is a proprietary of ICICI Lombard & IRM India
Affiliate, the content cannot be copied and/or distributed or communicated to any third party without permission of ICICI Lombard &
IRM India Affiliate.
ICICI trade logo displayed above belongs to ICICI Bank and is used by ICICI Lombard GIC Ltd. under license and Lombard logo
belongs to ICICI Lombard GIC Ltd. ICICI Lombard General Insurance Company Limited, ICICI Lombard House, 414, Veer Savarkar Marg,
Prabhadevi, Mumbai – 400025. IRDA Reg.No.115. Toll Free 1800 2666. Fax No – 022 61961323. CIN (L67200MH2000PLC129408).
customersupport@iciclombard.com, www.icicilombard.com
The IRM logo displayed above belongs to the Institute of Risk Management (IRM) and is used by IRM India Affiliate under authorisation.
IRM India Affiliate is the official trade name for Gleco International Private Limited (as per GST registration). IRM India Affiliate, 9th
Floor, Corporate Park II, VN Purav Marg, Near Swastik Chambers, Chembur, Mumbai 400071. CIN U74140MH2019PTC333967.
communications@theirmindia.org, www.theirmindia.org

49
KEY CONTRIBUTORS
From Team ICICI Lombard
Burzin A. Sarbhanwala Rupesh Malpani Vinod Dangwal Vijay Dwibhashi

Vice President Deputy Vice President Deputy Vice President Associate Vice President
Property Risk Management Business Strategy & Marine Claims Marine Underwriting &
& Value-Added Services Product Team Claims
Bipin Titus Samata Parab Dinesh Singh Smrity Singh

Deputy Vice President Deputy Vice President Chief Manager Senior Product Manager
Liability Underwriting Liability Underwriting Property Claims Business Strategy &
Product Team
From Team IRM India Affiliate
Uday Gharpure Dr. Keerti Pendyal Nidhi Jain Dr. Sridevi

IRM Approved Faculty Assistant Professor and Sr. Manager, Marketing & Dean & IRM Coach
Consultant & Trainer IRM Coach Communications IFIM School of Management
Enterprise Risk Management Mahindra University
& Design Thinking
Meera Govindaraj Vijay Agarwalla Kosha Parekh, IRMCert

Assistant Professor & Head-Internal Audit Director, Academics
IRM Coach Emaar India
IFIM School of Management

50

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1

4. Global Risks Landscape..................................................................................................................................................11

5. India Risks Landscape................................................................................................................................................... 15

6. Risk Perceptions of India Inc........................................................................................................................................ 21

7. Preparedness to face risks in India Inc......................................................................................................................31

8. Risk Management and Insurance.............................................................................................................................. 38

9. Appendix I: Survey Methodology.............................................................................................................................. 46

10. Appendix II: References............................................................................................................................................... 48

11. Key Contributors............................................................................................................................................................. 49

ICICI LOMBARD – IRM INDIA RISK REPORT 2023 1

Forecasts predict that India’s GDP will double

ICICI LOMBARD – IRM INDIA RISK REPORT 2023 2

About ICICI Lombard:

About IRM (Institute of Risk Management):

ICICI LOMBARD – IRM INDIA RISK REPORT 2023 3

About the Report:

The report’s primary focus is threefold:

ICICI LOMBARD – IRM INDIA RISK REPORT 2023 4

Having a well-defined governance practice and a sound Enterprise

Thank you for being a part of this wonderful journey!

ICICI LOMBARD – IRM INDIA RISK REPORT 2023 5

As we stand at the dawn of a new decade, the nature of risk

The symbiotic relationship between professional expertise and

The symbiotic relationship between professional expertise and

ICICI LOMBARD – IRM INDIA RISK REPORT 2023 6

In the dynamic landscape of risk management, the role of an

At ICICI Lombard, we recognise the pivotal role we play in not just

Looking forward to your feedback and comments.

It is essential to channelise the abundance of information in an

ICICI LOMBARD – IRM INDIA RISK REPORT 2023 7

With its focus on both short-term and long-term risks, it will

ICICI LOMBARD – IRM INDIA RISK REPORT 2023 8

This will enable an organization to:

Preparedness to Face the Risks

Short-Term Priority Medium-Term % of ­organizations % of organizations

Cybersecurity Risks 1 1 33% 28%

Business Interruption 3 2 29% 19%

Technology 4 1 26% 36%

Legal / Regulatory Risks 4 3 26% 27%

Climate change / Natural Disasters 5 4 14% 34%

Funding / Investment Risks 5 3 16% –

Talent – 4 19% 41%

Civil Strife / Geopolitical issues – 5 9% 38%

Fire Hazard – 5 18% 25%

ICICI LOMBARD – IRM INDIA RISK REPORT 2023 9

Insight from Industry Wide Claims Trends

The key conclusions are:

Cultivating a Risk Culture

Fostering a mature Risk Culture serves not only to enhance

ICICI LOMBARD – IRM INDIA RISK REPORT 2023 10

4. GLOBAL RISKS LANDSCAPE

l The 2023 report also highlights the

ICICI LOMBARD – IRM INDIA RISK REPORT 2023 11

According to the 2023 WEF survey, an astounding 69% of respondents

ICICI LOMBARD – IRM INDIA RISK REPORT 2023 12

Sector Business Risks Operational Risks Legal and Regulatory Risks

• Green energy • Cyber-attacks • Political / Regulatory

• Market, Liquidity, credit • Security, cyber-attacks • Legal liabilities

• Macroeconomic conditions • Geopolitical • Regulatory

Short-Term Priority Medium-Term % of organizations % of organizations

Climate Change/Natural Disasters Funding/