Companies face more risks, but better prepared: Study

MUMBAI: The risk profiles of Indian corporates have improved due to better management despite their risk exposure increasing. ICICI Lombard’s ‘Corporate India Risk Index’ (CIRI), which reflects the outcome of an annual study of the risk profiles of Indian businesses, shows that risk management has improved due to government policies and efficient risk handling by companies to contain market & economy and operations-related risk.
By adopting efficient risk management strategies, the government and corporates have displayed resilience in the face of global challenges, such as rising inflation, slowing global growth, elevated commodity prices, and tightening global monetary policies.
According to the report, risk profiles have improved for infrastructure, real estate, aerospace & defence, and education. At the same time, they have worsened for chemical & petrochemical industries, agri & food processing and transportation. The CIRI score for businesses improved from 62 in 2021 to 63 in 2022, indicating better risk management. The risk profile improvement is despite the risk exposure index going up from 62 to 64. ICICI Lombard’s CIRI comprises 32 risk elements and draws upon best practices. A higher score signifies better risk management,.