Indian companies improve risk management despite global turmoil

Indian corporates have weathered the global headwinds and increased risk exposure in some sectors by demonstrating sound risk management and strategic progress leading to improved risk management outcomes, as per the fourth edition of ICICI Lombard Corporate India Risk Index (CIRI) 2023, a proprietary study conducted by ICICI Lombard in association with Frost and Sullivan. Government initiatives such as ‘Make in India’, continuous investment in infrastructure and promotion of sustainable energy management have played a key role in strengthening the resilience of the sector. Ongoing digital transformation and integration of AI across sectors have further enhanced operational efficiency and risk management practices.

CIRI 2023 covers 32 risk elements across six broad dimensions, drawing on best practices in global risk management. The unique scale identifies the optimal risk management to which companies are individually exposed, enabling them to adopt effective practices without over-investing. The fourth edition shows an improvement in the risk index score from 63 in 2022 to 64 in 2023. The improvement in the score in the fourth edition of the Corporate Risk Index is a testament to the effective risk management practices adopted by Indian corporates in the face of global headwinds and challenges.

“As we move forward, businesses need to stay ahead of the curve and adopt comprehensive and effective risk management practices, and ICICI Lombard helps clients manage risk with tailored services such as asset and engineering loss prevention, comprehensive risk assessments and cybersecurity solutions. These services provide a holistic view of risk, enabling clients to enhance operational resilience to ensure long-term stability and growth,
notes Sandeep Goradia, Director, Corporate Solutions, ICICI Lombard.

The 2023 Risk Index shows all 20 sectors are ‘better’ or ‘optimally managing risk’, with nine sectors showing ‘better’ handling, including telecoms and communications, pharmaceuticals, healthcare, automotive and ancillary services, manufacturing , fmcg, media and games, new age and start-up, and tourism and hotel industry. the bfsi sector showed significant improvement in cybersecurity measures but remained vulnerable to global economic volatility.

Manufacturing, Metals & Mining and New Age sectors saw significant progress in risk indicator scores. However, FMCG, Biotechnology and Life Sciences faced challenges due to dynamic consumer needs and geopolitical events,