Private general insurer ICICI Lombard has launched the ‘Corporate India Risk Index’. This is intended to be a unified, standardised corporate risk index that spans industries and companies.
The insurer said that this will help companies understand the level of risk that their business is facing and also assist in developing a successful risk aversion plan. It has worked with consulting firm Frost and Sullivan to develop the risk measurement tool.
A total of 15 sectors including IT/ITeS, BFSI, automotive and ancillary, pharma and biotech, e-commerce, manufacturing, realty, FMCG/retail among others are part of this index.
Bhargav Dasgupta, MD & CEO, ICICI Lombard, said that this initiative will empower India Inc to gauge risks better, understand their level of preparedness and accordingly adopt effective risk management practices.
Corporate India Risk Index in its debut edition stands at 57, which implies optimised risk handling methods. The score suggests that though India Inc. is on the right track, emerging risks need more diligence.
The index showed that most of corporate India’s risk management strategies are focused primarily on operational and natural hazard risks, influenced by COVID-19. It added that there is a scope for improvement in the way market, economic, technological and crime or security risks are being managed.
Further, the index showed that most of these sectors handle operational and physical risks really well. Here, the exception is the chemicals and pharma sector where that risk category is an intrinsic risk.
Overall, superior risk handling was found in four sectors namely healthcare, BFSI, media-telecom and IT/ITeS. Here, FSI is the only one with very high risk exposure than others but excels in risk management too.
This index also aims to help firms understand the level of risk their business is facing and current level of preparedness.
The framework measures risk across four parameters– awareness, probability, criticality and preparedness; bifurcated into risk exposure and risk management. Through individual scores, a firm will be featured on a spectrum spanning from being ineffective to over-prepared.
