Why Insurance CFOs Are the New Risk Champions: A 2025 Perspective
Risk management has moved to the top of every insurance CFO’s priority list. Duke University and CFO Magazine’s Global Business Outlook Survey in late 2017 showed that attracting and retaining qualified employees was the main concern for CFOs. That picture has changed completely. The hard insurance market that started in 2019 continues through 2024, putting risk management front and center for CFO responsibilities.
The COVID-19 pandemic showed us how critical business resilience really is. Risk management now stands as one of the main pillars of today’s CFO role. Insurance CFOs face more risk-related challenges than ever before. Their traditional role has evolved into something much bigger – they’ve become strategic risk champions. This shift has changed what insurance CFO jobs look like and expanded what strategic CFOs need in their toolkit.
We’ll show you exactly why insurance CFOs are becoming the new risk champions in 2025. You’ll see how CFO concerns have evolved, what key risk categories they must manage, and practical frameworks for getting ahead of risk. The experts put it best: “The earlier risk can be identified, assessed, managed, and integrated into strategic planning, the better”. Understanding this shift matters for insurance company CFOs who want to lead their organizations through uncertainty and build sustainable growth.
The expanding role of the insurance CFO
Insurance CFO responsibilities have grown far beyond traditional accounting and financial reporting. Today’s CFOs take center stage in business strategy and risk oversight, becoming essential advisors to their CEOs.
From financial controller to strategic leader
Moving from finance controller to Chief Financial Officer means taking on a completely different set of responsibilities and skills. Modern insurance CFOs need strategic thinking capabilities that go well beyond just working with numbers. They must understand the broader business landscape. Strong interpersonal skills become critical for leading diverse teams effectively and explaining complex financial concepts in ways everyone can understand. This shift requires CFOs to step back from managing accounting functions and start shaping their company’s future through financial leadership that connects financial expertise with business strategy. They also need to maintain high ethical standards in every financial decision, building a culture of transparency that protects the organization’s reputation.
Why risk management is now a core CFO function
Enterprise risk management has moved to the top of the CFO’s priority list. Recent surveys show CEOs identify disruption from technologies like AI as their companies’ biggest risk, while three-quarters of compliance leaders expect regulatory challenges to increase. 9 in 10 chief risk officers want more budget for essential defenses. The CFO has a unique position to connect high-level risk oversight with day-to-day operational concerns across the company. A Travelers survey found that “identifying and mitigating various business risks” ranks as a top-three skill required of CFOs. Nearly two-thirds (62%) of companies now handle risk management proactively rather than waiting for problems to occur.
How insurance CFO jobs are evolving in 2025
Insurance CFOs deal with specific challenges that set them apart from CFOs in other industries. They must balance risk and profitability by collecting premiums, investing funds, and paying claims while keeping adequate reserves. Insurance CFOs in 2025 focus more on building strategic partnerships with other departments while handling regulatory compliance and driving business growth. They use advanced analytics and technology to boost operational efficiency and deliver real-time financial insights. The modern insurance CFO handles solvency calculations, develops accurate pricing models, and allocates capital strategically across different asset classes. Many also lead cybersecurity efforts to protect sensitive customer data, addressing a growing concern for insurance companies.
Key risk categories insurance CFOs must manage
Insurance CFOs deal with more risks today than ever before. These risks require smart oversight and proactive management. Understanding these key categories is essential for strong financial leadership in insurance.
Cybersecurity and data protection
Cyber threats hit insurance companies where it hurts most – the bottom line. Data breaches cost an average of USD 4.45 million in 2023. Nearly 95% of attacks target financial gain, not political causes. Insurance companies make attractive targets because they hold massive amounts of sensitive customer data. CFOs need to work closely with chief information security officers to rank threats by financial impact and keep defenses strong.
Operational and supply chain disruptions
Business interruption losses eat up 50-70% of catastrophe losses. IT outages from cyber-attacks create the biggest threat to supply chain stability. CFOs must recognize how just-in-time inventory management makes companies vulnerable to rapid inventory loss during disruptions. This means CFOs need to oversee business continuity planning that goes beyond short-term scenarios.
Economic volatility and inflation
Inflation has pushed insurers’ costs up significantly, with rates averaging 6.6% across G20 nations. Higher costs for claims, energy, and talent won’t drop anytime soon. Rising interest rates can actually help insurers – especially life insurers – by boosting solvency. CFOs must prepare for multiple economic scenarios by building flexibility into operating models.
ESG and regulatory compliance
Environmental, social, and governance risks affect insurers and stakeholders together. About 25% of global insurers say understanding ESG regulations is their biggest challenge. Nearly half of insurance CEOs admit their companies can’t measure greenhouse gas emissions. Almost half of states have adopted AI guidance, and market conduct exams examining AI usage will start soon.
Building a proactive risk management framework
Smart frameworks help insurance CFOs turn risk challenges into business advantages. Risk management systems gained serious attention after the global financial crisis and now form the foundation of successful insurance operations.
Enterprise risk management (ERM) explained
ERM gives insurance CFOs a clear method to identify, assess, monitor, and report risks when it matters most. When you implement this framework correctly, you get major benefits: reduced earnings volatility, stronger capital position, and higher profitability. ERM helps you understand how risks connect to your business goals and whether your risk levels match your appetite. The key to ERM success lies in connecting all departments – finance, actuarial, and strategy. You need to embed risk management into daily operations first, then build connections across your organization.
Integrating risk into financial forecasting
Strategic CFOs know that adding risk considerations to forecasting delivers much better prediction accuracy. This means using sophisticated quantitative methods to evaluate key risks and how they connect. You get enhanced financial assumptions, better risk-return alignment, and clearer analysis of risk drivers that affect earnings. For insurance CFOs, this translates to incorporating actuarial models into your financial tools and accounting for changing risk profiles in your projections.
Using internal controls to monitor risk
Internal controls provide the foundation for effective risk monitoring. They help insurance CFOs prevent errors, ensure compliance, improve operational efficiency, and reduce potential losses. A strong control system has five core components: control environment (your organization’s tone), risk assessment, control activities (policies and procedures), monitoring, and information/communication. Best practices include building a strong control environment, conducting thorough risk assessments, designing appropriate control activities, monitoring controls continuously, and communicating effectively with your team.
The role of scenario planning and modeling
Scenario planning gives insurance CFOs a powerful tool for handling uncertainty. These structured stories about possible futures let you explore how different risks might affect your organization. Scenarios come in two types: exploratory (teaching about plausible futures) and normative (helping with specific decisions). An effective scenario framework involves rating critical uncertainties, selecting key variables, and creating quadrant-based templates to develop complete risk narratives. AI-powered scenario planning tools make this process even stronger by analyzing large amounts of data and updating simulations as conditions change.
Collaboration and communication in risk leadership
Smart insurance CFOs know that risk management works best when everyone’s involved. The partnership between risk management and insurance functions helps companies stay ahead of problems before they become expensive mistakes.
Working with CIOs, COOs, and risk officers
The CFO-CIO collaboration has become critical for managing both innovation and risk. Most CIOs and CFOs see their partnership as essential – they know their combined efforts directly impact how well the company adapts and grows. CROs team up with CEOs and boards to protect against threats that don’t show up on financial statements. What makes this collaboration work? Clear communication channels, everyone knows their role, and a culture where people actually talk to each other.
Creating a risk-aware culture across departments
Strong risk cultures start at the top. The board and executive management set the tone, but every employee needs to understand what risks the organization will and won’t take. Risk management can’t be complicated jargon – it needs to make sense to everyone in the company. Setting up a risk committee with people from different departments gets the conversation started. Every person in your organization should understand the risks in their daily decisions and strategic choices.
Reporting risk insights to boards and stakeholders
Boards want the facts, not lengthy reports they don’t have time to read. They need clear, structured insights about risk exposure that connect to real business decisions. Every risk you highlight should link to a specific business outcome or decision. Insurance CFOs must explain the business impact and put numbers on risks whenever possible. Use impact-likelihood matrices to rank risks based on what they could do to your finances, operations, and reputation.
Conclusion
The shift of insurance CFOs into risk champions marks the biggest change in financial leadership we’ve seen. We’ve shown you how the traditional CFO role has grown well past financial reporting into complete risk oversight. This change reflects a key truth for insurance companies in 2025 – smart risk management drives sustainable growth and competitive advantage.
Today’s insurance CFO handles multiple risk categories at once. Cybersecurity threats create real financial dangers. Operational disruptions, economic swings, and changing regulations need constant attention. Smart CFOs now use structured frameworks like Enterprise Risk Management to spot, assess, and handle these different challenges.
Risk considerations in financial forecasting have become essential. CFOs who master this integration see huge advantages – better predictions and stronger risk-return alignment. Add solid internal controls and smart scenario planning, and you turn uncertainty from a threat into a strategic tool.
Risk leadership goes beyond frameworks and models. The best insurance CFOs know that department collaboration makes risk management work. Close partnerships with CIOs, COOs, and risk officers create complete risk oversight across technical, operational, and financial areas.
Risk-aware cultures don’t happen by accident. They need deliberate building and clear communication from leadership. CFOs must turn complex risk concepts into simple language that works throughout the organization. Everyone needs to understand their role in managing risk.
The change of insurance CFOs into risk champions creates both challenge and opportunity. Those who embrace this bigger role will position their organizations to succeed despite uncertainty. They turn potential threats into competitive advantages. The insurance CFO of 2025 stands at this important crossroads – where financial leadership meets strategic risk leadership – ready to guide their organizations through whatever comes next.
