As India Inc. battles the impact of the COVID-19 pandemic, a key takeaway among companies has been putting an effective risk management process in place. It not only helps in having a robust liquidity position, but also ensures growth momentum.
One such strong advocate of a strong risk management profile is ICICI Lombard, which deployed its enterprise risk management (ERM) framework over a decade ago. “This unprecedented crisis teaches how companies need to function from an ERM perspective,” said Gopal Balachandran, CFO and Chief Risk Officer at ICICI Lombard in an interview with YourStory Business Editor Vishal Krishna.
One of the learnings from the current crisis, he said, was how the company has been adhering to its goals of profitable growth despite its core competencies being tested, and how it has been ensuring the protection of its balance sheet without compromising its responsibilities as an organisation.
For instance, he explained how ICICI Lombard managed to keep employee safety at its optimum level while following a healthy business continuity plan, how it had a comprehensive risk assessment and management framework in place, and rapidly adopted technological solutions to manage security risks and smoothen underwriting processes.
“We have been able to conduct virtual risk inspections and carry out virtual claim services and, in the process, run the business as usual,” Gopal said.
Speaking on operating risks, he highlighted the need to have systems and information-related security mechanisms without compromising customer service standards. “It was also important for us to hand-hold distributors/intermediaries in adopting digital technology to continue the business.”
Gopal also elaborated on the insurer’s reliance on technology to maintain its growth momentum and flag tolerance and fraud risks. “We have been undertaking virtual risk inspections prior to underwriting the risk, which helps in effective protection of the balance sheet,” he said, adding that the company is looking to tap further growth segments such as comprehensive health insurance products.
Going forward, Gopal is bullish on the long-term prospects for the insurance sector as its penetration levels are currently low . He also said that organisations with multi-product, multi-channel and multi-customer approaches will be able to tide over these tough times.
Watch the full interview here.