Risk and Insurance Management Society (RIMS) Certified Risk Management Professional (CRMP) Practice Exam

Which of the following would signal a potential change in an organization's risk context?

1. The organization acquires a new business

2. The organization changes insurance brokers

3. The organization's board of directors reviews a compliance report

4. The organization publishes its annual report

The correct answer is: The organization acquires a new business

Acquiring a new business serves as a significant indicator of a potential change in an organization's risk context. This type of transaction often brings various new risks that need to be considered, such as operational risks, market risks, legal liabilities, and financial implications specific to the new business unit. Integrating a new business can alter the risk profile of the entire organization, as it may introduce unfamiliar regulatory environments, different customer bases, or new technologies. Additionally, the process of merging operations might result in shifts in company culture, employee dynamics, and stakeholder perceptions. On the other hand, while changing insurance brokers, reviewing a compliance report by the board, or publishing an annual report can reflect certain operational shifts or regulatory compliance considerations, these actions do not typically symbolize a fundamental change in the risk landscape. They may be part of ongoing risk management activities but are less likely to introduce extensive new risks or significantly alter existing risk profiles compared to the acquisition of a new business.