Cyber-attack or data breach is considered to be one of the most critical risks faced today. The BFSI sector endeavored to overcome the same by adopting data security measures including database encryption, stricter controls across levels and application of data leakage prevention tools, Sanjeev Mantri, MD & CEO, ICICI Lombard General Insurance
Despite facing global headwinds and increased risk exposure in certain sectors, Indian enterprises have demonstrated resilience and strategic advancements, leading to improved risk management for India Inc .
The fourth edition of the ICICI Lombard Corporate India Risk Index (CIRI) 2023, a proprietary study conducted by ICICI Lombard in collaboration with Frost and Sullivan, shows an improvement in the risk index score from 63 in 2022 to 64 in 2023.
Although global events, financial instability, and economic headwinds have challenged several industries, modern risk management solutions accounting for unprecedented events have enabled many to bounce back.
Sanjeev Mantri, MD & CEO, ICICI Lombard General Insurance, said, if a word should be associated with risk it should be ‘resilience,’ as demonstrated by India’s risk landscape this year, which despite geopolitical tensions, extreme weather events, and constant inflation, achieved a score that represents optimal risk handling with room for improvement.
Cyber-attack or data breach is considered to be one of the most critical risks faced today. The BFSI sector endeavored to overcome the same by adopting data security measures including database encryption, stricter controls across levels and application of data leakage prevention tools, he elaborated..
Further, the Healthcare sector focused on digital solutions like telemedicine and AI-powered diagnostics to combat persistent manpower shortages and lingering issues with global supply chains. Another good example is the Agricultural & Food Processing sector which despite being the most vulnerable to climate change, surprised everyone by embracing technological solutions like precision farming, vertical farming, hydroponics, aquaponics, and farm-to-fork initiatives, explained Mantri.
As an emerging economic superpower, India is witnessing technological disruption on an unprecedented scale, across industries. From electric vehicles to artificial intelligence integration,block chain economies, 5G networks, and virtual versions of practically everything, the risk landscape has grown exponentially, highlighting the need for modern risk management solutions and practices, he opined.
Aroop Zutshi, Global President & Managing Partner, Frost & Sullivan, commented that the BFSI sector has made commendable strides in bolstering cybersecurity measures, yet remains susceptible to global economic volatility. Noteworthy is the remarkable improvement witnessed in sectors like Manufacturing, Metals & Mining, and the New Age sector, underscoring their resilience.
Companies across sectors have experienced risks related to reputation and sustainability adherence. Disruptive technologies like AI, Block chain, 5G and IoT are reshaping business models and offering new avenues for innovation and growth across sectors – the risks around these are still nascent and risk management is evolving, stated Zutshi.
The “Make in India” initiative drove significant changes in supply chain operations – the strategic shift towards domestic production is enhancing resilience and competitiveness across industries.
The CIRI 2023 comprises 32 risk elements across six broad dimensions, drawing upon global risk management best practices. The report identifies optimal management of the risks companies are individually exposed to, enabling them to adopt effective practices, without over-investing.
The 2023 Risk Index shows all 20 sectors in ‘Superior’ or ‘Optimal Risk Handling,’ with nine sectors demonstrating ‘Superior’ handling, including Telecom & Communication, Pharmaceuticals, Healthcare Delivery, Automotive & Ancillary, Manufacturing, FMCG, Media & Gaming, New Age & Start-up, and Tourism & Hospitality. The BFSI sector showed significant improvements in cybersecurity measures but remained susceptible to global economic volatility.
The Manufacturing, Metals & Mining, and New Age sectors displayed notable advancements in their risk index scores. However, the FMCG and Biotech & Lifesciences sectors faced challenges due to dynamic consumer demands and geopolitical events, resulting in a slight downgrade in their risk index scores.
The report highlights the widespread adoption of telemedicine, online banking, and remote work solutions, driven by the COVID-19 pandemic. Sectors have also focused on sustainability, with significant investments in renewable energy sources, eco-friendly practices, and precision farming techniques.
Government initiatives such as “Make in India,” continued investments in infrastructure, and the promotion of sustainable energy management have played a pivotal role in bolstering sector resilience. The ongoing digital transformation and AI integration across sectors have further enhanced operational efficiencies and risk management practices.