BFSI has among the best risk management practices: ICICI Lombard

Regulated sectors like the BFSI have best risk management practices according to a new Corporate India's risk index launched by ICICI Lombard, while new age sectors will still have a long way to go. The index which is based on current situation information of corporates is also expected to help attract foreign investments.

Banking, financial services and insurance BFSI with a score of 65m though has a very high risk exposure, it excels in risk management too with very effective and efficient risk management practices, according to ICICI officials. They (BFSI) are well positioned to handle current and future risks across dimensions. " Regulated sectors are more risk conscious as the regulators manage to bring in consistency and discipline" said Bhargav Dasgupta MD, CEO at ICICI Lombard. Superior risk handling was also found in sectors like Healthcare, Media – Telecom and IT-ITES

New age companies on the other hand lag in risk management as they leverage on new business models and new technology and fail to focus on risk management. "But as time progresses we will see more such companies spending more on risk management" said Alok Agarwal, executive director at ICICI Lombard.


ICICI Lombard Corporate India Risk Index launched along with US based consulting firm Frost and Sullivan, is an unified, standardized corporate risk index that spans 15 sectors and 150 firms using current information of companies and aims to help companies understand the level of risk that their business is facing and also assist in developing a successful risk aversion plan.

A score of upto 30 implies that all risks are handled effectively. But risk management practices are likely dated or inefficient. A score of over 80 implies that the firm has high investment in risk mitigation practices. Likely over-investment in one or more risk dimensions but difficult to justify return on investments.

Delivering the keynote address, US based business consultant Ram Charan, underscored the need fpr more risk management practices as the COVID-19 has thrown the challenge of dealing with the `unknown unknown' situations and such risk indices may also be useful at policy level inattracting foreign investment into the country among others.