3 Data-Forward Strategies Risk Managers Can Use to Engage with the C-Suite

If a risk management department wants to purchase a new insurance coverage or invest in any tools or technologies to help prevent claims from occurring, they’ll need to get approval from a critical group of executives: the C-suite. In fact, they have to get the buy-in from their C-suite in almost everything they do.  

However, communicating the value of risk management to the C-suite is not always an easy task. CEOs and CFOs might believe that their risk departments are only there to purchase insurance policies or manage any claims that occur. They often overlook the other tasks risk managers do for their organization, such as creating incident response plans, reducing the number of repeat losses a company faces per year, and preparing the business for emerging exposures — all of which are important to the success of a company. 

Risk professionals can help executives see the value they bring to the company by using data to share how their efforts have helped the company save money, analyze what risk investments would have the most impact, and draw attention to any emerging trends.   

 Here are three data-forward strategies risk managers can use to engage with CFOs and other executives:         

1. Use Data to Share Success From Last Year.

Risk managers play an essential role in protecting companies, including evaluating financial, personnel, and other risks on a near-constant basis to reducing repetitive losses, acquiring new technologies for their risk departments, and creating response plans to protect their company’s reputation. Risk managers do a lot (often with very little), but if they can’t communicate their efforts to the C-suite and get the necessary funding they need, then a lot of that effort can feel wasted. 

Risk managers can engage C-suite executives and make them care about risk programs by sharing program data and highlighting the department’s successes. CFOs typically care about the hard numbers. In response, risk managers should focus on illustrating how much money was saved or how much revenue was generated from a certain investment.  

Risk managers can take this one step further by showing the data of how many claims were reduced by a certain action, such as implementing a particular safety feature. If a loss does occur, analyzing claims data can help CFOs and other executives understand the value of a strong insurance program and how it helped the business recover quickly and with minimal business interruption. 

Additionally, data can help risk managers assess their incident response plans and identify whether their approach was successful and why. Sharing those results with executives can help those executives understand the value of creating and optimizing response plans, investing in risk management, and purchasing insurance to ensure they’re financially protected in the event of a loss.      

2. Pitch Strategic Program Investments to Minimize Risk. 

C-suite executives, in general, respond to numbers. If a risk manager understands how much a particular investment will cost and how much it will save in the event of a loss, they can make a compelling argument for funding those initiatives.  

Evaluating program data can also help risk managers identify any uninsured or underinsured parts of the business so they can find essential insurance policies that will cover critical exposures and protect the company. Risk managers should go into any budget meetings with data illustrating what exposures a company faces, how much insurance premiums cost, and how a particular investment could help reduce these costs and save money in the long term.   

If their analysis identifies any potential weak spots and the risk manager determines that an investment should be made, then they should look for tools — be it new technologies, training initiatives, or planning systems — that can help address those risks. Oftentimes, there may be many different providers or solutions on the market for a particular exposure. Risk managers should evaluate each one to understand its performance, return-on-investment (ROI), and how it might reduce insurance premiums before pitching a potential investment to company leadership.   

3. Draw Attention to Trends that Might Affect their Programs.

Data is a powerful tool for understanding the world around us. It can help shed light on everything from how a business has grown over time to how its supply chains are functioning.  As exposures shift, risk managers may want to study how they’re impacting their organization both in the present and in the future.   

Take cyber insurance as an example. If you look back fifteen or even ten years ago, cyber was considered a risk for only the biggest companies. But as cyberattacks proliferated and began targeting smaller companies, cyber insurance and incident response plans became critical for companies of all sizes. Savvy risk managers who paid attention to cyber-attack data and stayed on top of trends were able to remain ahead of cyber risks.  

Monitoring and understanding claims data from similar industries can be translated to almost any emerging risk.  

Climate data can help risk professionals understand what natural catastrophe risks might affect their businesses and what tools they need to respond and recover. Studying the frequency of new types of cyberattacks can help them prepare their security systems to withstand similar events. Understanding inflation and rising interest rates can help companies evaluate how much it would cost to recover from an event and whether the cost of the materials needed for repairs has increased as we enter an economic downturn.   

By carefully studying data to understand trending exposures, risk professionals can prepare response plans to ensure business resilience and continuity. Then, they can identify any investments that need to be made, so that an organization can withstand an event and pitch those ideas to company leadership. Preparing in advance can help risk managers manage multiple risk factors at once — a skill crucial in today’s increasingly complex world. 

Tools That Can Help Risk Managers Engage With Their Data 

Despite the importance of data, policy information, insurance schedule, and prior claims history are often poorly organized. As an industry, risk management often lags behind other industries when it comes to updating technological systems, preferring to retain old ways of doing things rather than learn new systems.   

But new tools, such as LineSlip, can help make data more accessible and easier to communicate with executives. Risk professionals may want to turn to technology tools that streamline policy information and calculate an organization’s total cost of risk (TCOR) to help clean up their data, so it’s readily available to share with executives.  

Regardless of which methods risk professionals use to engage with data, using data is a strategic way to demonstrate the value of risk departments to the C-suite. Risk professionals can use it to show their wins, determine where investments can be made, and learn about new risks that could affect their programs. With data in their hands, risk professionals can utilize the data to tell their C-suites a story.