6 Risk Questions Every CFO Should Ask
A smart risk strategy is more than just insurance: it’s a crucial component of protecting your balance sheet and enabling sustainable growth. As a CFO, you are tasked with steering the company’s financial future while navigating challenges like rising operational costs, talent retention, supply chain disruptions, extreme weather events and emerging cyber threats. This requires asking tough questions to ensure your risk management program is not only providing adequate protection but also operating as efficiently as possible.
To help you align your risk strategy with your financial goals, here are six key questions every CFO should ask.
1. Are we overpaying for volatility we can afford to retain?
Many growing companies default to low deductibles to minimise immediate risk exposure. While it seems safe, this approach often leads to higher premiums and ties up capital that could be better used to fuel growth. A more strategic approach involves evaluating how much financial volatility your company can comfortably absorb and adjusting your risk retention strategy accordingly.
Actionable Insight:
Calculate your company’s true risk-bearing capacity. This isn’t just a number, it’s about understanding the trade-offs between cash flow, capital reserves and growth investments. Identify areas where higher deductibles, alternative risk financing, or self-insurance could lower premiums without putting the balance sheet in jeopardy. This analysis frees up capital for strategic priorities.
Consider This:
If your company pays for low deductibles “just in case,” you are likely overspending. A partner with deep benchmarking data can help you determine an optimal retention level that aligns with your specific financial profile and risk appetite, turning your insurance program into a tool for capital efficiency.
Learn more: Global Insurance Market Insights
2. Are we underinsured against risks that could disrupt our growth?
The risk landscape has expanded far beyond property damage and general liability. Risks like cybersecurity breaches, supply chain disruptions and reputational damage can be particularly devastating, stalling momentum and eroding enterprise value. Risks are more interconnected than ever and can impact an organisation directly and indirectly.
Actionable Insight:
Conduct a comprehensive risk assessment focused on the emerging threats that are most relevant to your industry and growth stage. Are you adequately covered for a cyber-attack that halts operations or a key supplier failure that cascades through your production line? Gaps in coverage for these modern risks represent significant vulnerabilities.
Consider This:
Ignoring emerging risks creates dangerous blind spots. A single uninsured event can derail your strategic plan. Proactively work with a risk advisor to identify and close these gaps, for example with risk tolerance consulting and vulnerability assessments, to ensure your coverage evolves alongside your business and the changing market.
Learn more: Client Trends 2025
3. How do our coverage, limits, and costs compare to our peers?
Benchmarking is essential – without it, you can’t confidently assess whether your insurance spend is delivering the value it should. Are you overpaying for standard coverage? Are your limits in line with what similar companies in your sector carry?
Actionable Insight:
Leverage industry data to benchmark your risk management program against peer companies. This comparison should go beyond premiums to include coverage terms, limits and deductibles. This objective analysis provides a clear picture of whether your program is competitive and cost-effective.
Consider This:
You may be missing significant cost savings or exposing your company to unnecessary risk without realising it. An informed partner can provide access to robust benchmarking tools and insights, helping you negotiate from a position of strength and ensure your program aligns with best practices, including specific risks and coverages for your industry.
4. Is your broker delivering value beyond traditional insurance placement?
In today’s complex risk landscape, a broker can act as a strategic partner by introducing innovative solutions like captives, parametric coverage and data-driven analytics. These tools help better manage volatility, optimise capital and align insurance strategies with broader business goals.
Actionable Insight:
Evaluate whether your broker is proactively bringing forward advanced risk financing options such as group captives, single parent captives or parametric products tied to measurable events like weather or supply chain disruptions. These approaches can offer greater control over cost, improved claims responsiveness and coverage tailored to your organisation’s unique exposures.
Consider This:
If your broker is focused only on traditional coverage, your organisation may be missing opportunities for greater efficiency, insight and protection. A knowledgeable broker can provide guidance that supports smarter risk decisions and long-term value.
Learn more: Unlock the Potential of Alternative Risk Transfer Solutions
5. Does our program reflect our financial strength and today’s market?
As your company grows, your balance sheet, risk appetite and market environment all evolve – many insurance programs don’t. They’re renewed year after year with minimal strategic review, missing opportunities to optimise costs and coverage.
Insurance markets are cyclical. A “soft” market, characterised by increased competition among insurers, may present a valuable opportunity for some buyers. If your program has been on autopilot, you may be missing a chance to improve terms and reduce costs.
Actionable Insight:
Re-evaluate your risk portfolio in the context of both your current financial strength and the broader insurance landscape. Are you carrying coverage that no longer fits your risk appetite, or missing a chance to negotiate better terms due to favourable market conditions? Your financial strategy should inform your insurance strategy, not the other way around.
Consider This:
A static risk management program is likely misaligned in one of two ways: you’re either overpaying for protection you no longer need, or you’re under protected against today’s most pressing risks. A proactive review, especially during soft market conditions, can unlock savings, broaden coverage, and ensure your insurance supports both capital efficiency and resilience.
Learn more: Global Insurance Market Insights
6. Do I fully understand the financial impact if our top risks materialise?
Knowing your top risks is one thing; quantifying their potential financial impact is another. Many organisations underestimate the true cost of a major disruption, which includes not just immediate expenses but also business interruption, reputational harm and lost growth opportunities.
Actionable Insight:
Use financial modelling and scenario analysis to quantify the potential bottom-line impact of your company’s most significant risks. For example, what would a three-week shutdown of your primary production facility cost in lost revenue and extra expenses? This analysis provides the clarity needed to make informed decisions about risk transfer and mitigation.
Consider This:
Without a clear understanding of the potential financial fallout, you may be critically underinsured. By modelling worst-case scenarios, you can build a business case for strategic investments in insurance and risk mitigation, ensuring the company’s resilience.
Learn More: The CFO Roadmap: Better Decisions for Multidimensional Growth
Strengthen Your Strategy, Protect Your Future
For CFOs, managing risk is a strategic cornerstone for safeguarding growth, empowering your people and protecting your financial foundation. Asking these questions is pivotal as you navigate rapid expansion, evolving market demands and increasing complexity.
A forward-looking approach demands collaboration and practical insight: ensuring your risk retention, coverage strategy and balance sheet alignment support operations. By addressing these critical areas, you are better positioned to optimise capital, respond to uncertainty and seize new opportunities.
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Our experts are available to help you to strengthen your risk retention and insurance coverage strategy, aligned to your financial goals. Click below to arrange a meeting with Aon.
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