On February 11, 2021 ICICI Lombard General Insurance Co. Ltd launched its 1st ‘Corporate India Risk Index 2020’.India’s Corporate India Risk Index stands at 57.The HealthCare Sector topped among the sectors with the highest score of 70, which indicates that it manages the risk well.
i.The Corporate India Risk Index 2020 uses a risk measurement tool that has been developed by ICICI Lombard in partnership with Frost and Sullivan, a leading management consulting firm.
ii.The Corporate India Risk Index 2020 covers top 150 companies from its own investment portfolio across 15 Key Sectors.
Aim: The index will enable companies to understand the level of risk and current readiness their business is facing. To Help them to create successful risk mitigation plans.
Corporate India Risk Index 2020
Highlights of Corporate India Risk Index 2020
i.BFSI is in second place with the score of 65 followed by IT-ITES with the score of 64.
ii.The Only Company that scored below 50 was Logistics & it scored 47.
Scores obtained by Each Sector:
| Sector | Score | Sector | Score |
|---|---|---|---|
| Health Care | 70 | Chemical | 55 |
| Banking, Financial Services and Insurance(BFSI) | 65 | Fast-Moving Consumer Goods(FMCG) | 54 |
| Information Technology(IT)/Information Technology enabled Services(ITeS) | 64 | Energy | 52 |
| Media and Telecommunications | 60 | Pharma | 52 |
| Metals and Mining | 60 | New age | 51 |
| Automotive | 59 | Hospitality | 50 |
| Infrastructure and Realty | 57 | Logistics | 47 |
| Manufacturing | 57 |
Scores and their Explanation:
i.Below 30 (Ineffective)– Very high exposure or very poor risk management practices
ii.Between 30-50(sub-optimal)– Does not handle risk effectively and the risk management practices are inefficient
iii.Between 50-60 (Optimal)– Most of the current risks are handled effectively. More attention is needed to the emerging risks associated with strategic initiatives
iv.Between 60-80 (Superior)– Good risk management practices. Can handle current and future risks across dimensions.
v.Over 80 (Over-prepared)– Companies has invested heavily in risk mitigation.
Note– It also highlighted that most of the risk management strategies are focusing on operational and natural hazard risks in the wake of COVID-19 pandemic. They also need better management of market/economic, technological and crime/security risks.
Calculation
The risk index is computed after calculating the corporate house’s exposure and management of various risks including, physical risks, risks related to technology, security, and those associated with natural hazards. The index also looks at market and macro factors
Parameters
i.The risk is measured across 4 parameters namely
- Awareness
- Probability
- Criticality
- Preparedness
ii.The parameters will be separated into risk exposure and risk management.
Risk Elements
The framework that comprises 32 risk elements across 6 broad dimensions.
Recent Related News:
On January 1, 2021, the Reserve Bank of India (RBI) introduced the RBI-Digital Payments Index (DPI) to measure a growth in digital or cashless transactions across the country. It was released on the lines of the Statement on Developmental and Regulatory Policies as part of the Sixth Bi-monthly Monetary Policy Statement for 2019-20 dated February 06, 2020.
About ICICI Lombard General Insurance Co. Ltd:
HeadQuarters– Mumbai, Maharashtra
Managing Director(MD) and Chief Executive Officer(CEO)– Bhargav Dasgupta
Established– 2001
