Indian companies must gear up to face emerging new-age risks, such as cyber threats or they might face huge disruption if major attacks happen. Preparedness should include measurement and testing to assess ways to mitigate risks. “Disrupt yourself before others disrupt you,” Alok Agarwal, Executive Director, ICICI Lombard, said at the Hyderabad Chapter of the Risk Master Class, organized jointly by ICICI Lombard General Insurance and CNBC-TV 18, in the run-up to the India Risk Management Awards (IRMA). Agarwal felt Indian companies are yet to recognize new-age risks fully. “Cyber liability has picked up but not to a large extent. Barely 40-50 companies, mainly in the BFSI and IT sectors, have a high awareness of cyber liability. The total industry premium on cyber liability would be around Rs 30 crore in a Rs 1,70,000 crore market. We are expecting growth of two-and-a-half times in the next year. In terms of growth, this seems high, but it is not even 1 per cent of the total industry premium,” he said. Agarwal said companies should continuously test how prepared they are to the risk environment. “Measurement and testing are one of the best ways to mitigate the risk. You have to test how prepared you are,” he said. However, there are signs of companies starting to take new-age risks seriously, feels Gaurav Arora, Head, Corporate Underwriting and Claims, ICICI Lombard. “We are seeing companies becoming more sensitive towards risk. CXOs are keen to discuss how we can partner with them to mitigate and manage risks. More importantly, discussions are not limited to risk financing but a more holistic approach of developing comprehensive risk management frameworks,” he said. Arora said an ICICI Lombard survey on risk management has shown that Cybercrime and data theft are two most emerging risks accounting for 30 percent and 18 percent of the risk landscape. Moreover, 67 percent of respondents believed data theft and cyber-risk had increased considerably in the last three years, and 43 percent believed there is uncertainty over these risks primarily because of the uniqueness. It is also difficult to trace the source of these risks. “To manage these emerging risks it is imperative that we consistently strive to devise our techniques to assess and price these risks better,” he said. Rajendra Prasad, Associate Vice-President, Risk Management Division, Greenko, pointed out insurers are supporting companies in risk mitigation. “The main idea is to avoid the losses or control the risk. We get good support from ICICI Lombard for predictive risk management and efficiency enhancement through aerial imaging to meet our organizational risks,” he said. Rakesh Singhania, Senior VP, Enterprise Global Services, Finance, Wells Fargo said cybersecurity and data protection are emerging risks for the financial sector. “These are huge risks because you are dealing with tones of customer data. The other thing that is changing the financial sector is technology and digital. Customers are looking for newer and newer experiences every day. Therefore how you reach your customers in the quickest form and is beneficial is some of the challenges,” he said. On the pharmaceutical sector, Kiran Yanamandra, Head of Treasury, Risk, Insurance and M&A, Dr Reddy’s Laboratories said the top challenges are global regulatory changes, particularly in the field of pharmaceutical quality, and to be able to meet the changing requirements of USFDA or MHRA (Medicine and Health Product Regulatory Agency, UK) or the European quality authorities. “Also, since medicines are consumed by patients, patient safety continues to be a big risk,” Yanamandra said. He said if a business is integrated with global trade like Dr Reddy’s, whether on the supply or demand side, the biggest risk mitigation tool is adequate geographical diversification. Sunil Saraf, Vice President, Commercial, Gemini Edibles & Fats India, also pointed out the need for diversification in the context of the emergence of climate change as a risk. “Climate change is very important for us as we deal with agriculture product. We cannot do much about it, but it is a very important risk. We monitor things and whenever needed, take up with the government. Also, we keep our suppliers in various locations to ensure there is no disruption,” he said.