John Merkovsky, Group Head of Risk Services at Willis, spoke with during the 2015 RIMS Conference in New Orleans, about the latest in risk management analytics, and the need to unlock the mysteries surrounding their benefits.

Risk Managers are looking for more information and certainty so they can make better and informed decisions. Mr. Merkovsky says risk analytics help them achieve this goal. More data and analytics helps organizations make better decisions against their “limited risk spend.” With analytics, risk managers can run different risk scenarios to understand their exposures, as well as their losses or potential losses in ways they couldn’t before.

According to Mr. Merkovsky, “The use of data and analytics help organizations have more insight into how they set limits and… retention levels.” For cyber risk, companies need to determine the best risk transfer mechanism. They need to understand what type of data they have, and the environment in which they work so their risk transfer mechanisms are in sync.

Mr. Merkovsky sees a need to demystify the use of data and analytics. Many risk managers do not have the experience or knowledge in analytics, and it has become “too complicated.” He says risk managers face a number of obstacles. First, risk managers need to be grounded in analytics. The insurance industry has a lot of data. but it needs to be identified and aggregated before you can start analyzing it. Being able to interpret the data is also a problem, as tools need to be easy to use by risk managers and senior management – not just by actuaries.

Mr. Merkovsky recommends that risk managers choose “the right partners…who have the data…who have the technical expertise.”

For more World Risk and Insurance News from the 2015 RIMS Conference in New Orleans, visit the dedicated RIMS 2015 Channel in the On Demand Library.

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