Key short-term risks: cyber, sustainability, regulation

Cyber risks, sustainability and regulation are the three issues that Richard Hoult, Airmic’s incoming chair, identifies as being the principal risks for members to manage over a short-term horizon span of two to five years. 

The executive, who is also vice president of risk, audit and compliance, Synthomer plc, a UK chemicals business, said that each of these three risks presents different challenges.

He says the cyber space is changing so quickly, it can be hard for companies to keep up. Sustainability is important because all businesses should look to cause less harm to the environment. And he flags regulation as being a challenge because of a much higher focus on compliance. He offers a raft of changes in the US as an example but also cites new regulations such as the Economic Crime and Corporate Transparency Act in the UK, to climate-related regulations in the EU.

He also identifies the challenges companies face in managing these risks. He stresses the cost of “not keeping up”, a lack of capacity for businesses needing to manager large volumes of risks. He also notes the importance of having risk managers who can guide the business to best ways to manage these risks.

Part of this challenge is assessing the risk appetite of a business – from this, stems the best way of managing these risks. He notes that this should also extend to risks where insurance might not be an option – and to ensure solutions are proportional. 

“It is important to ensure the risk programme matches the risk appetite of the business. Too much insurance isn’t cost effective, too little, and there could be exposures. This sounds easy to say, but many insurance programmes are very risk averse, rather than risk appetite based,” he said. 

Commenting on being Airmic’s incoming chair, he said he spent more time with current chair Fiona Davidge over the past nine months to understand some of the activities and priorities. He has also made efforts to get to know all the Airmic team.

He sees his role as ensuring Airmic remains relevant and value-adding to the risk and insurance community, while also supporting the association in expanding its membership base to more organisations. “I also want to ensure Airmic is fit for the future regarding its systems/ processes – including overseeing the new CRM system and the new website,” he said.

Hoult started his career in 1997 performing finance-related roles for Fujitsu and SITA before moving to British Gas. He has held increasingly senior roles in risk management in companies including British Gas (where he was also appointed to the board of the captive insurer Centrica Insurance Company), Thames Water and Portakabin – in addition to Synthomer.

He said he has always tried to educate people about the importance of risk management. “I believe I’ve made a difference in how people perceive risk management – it’s not just about the risk, but it’s also about the opportunity. If people are the business are engaged, they are more likely to see the value in risk management.”

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