Covid-19 is an opportunity for risk professionals to demonstrate the strategic value of their work
The scale and velocity of the Covid-19 pandemic took many organisations by surprise, according to a report from Airmic, the UK association for risk and insurance professionals. The research also reveals that risk professionals are receiving more board time than ever before as the pandemic disruption erodes internal organisational barriers.
The report, Top risks and megatrends 2020, identifies the biggest risks facing UK organisations and exposes how businesses and risk professionals have responded to the global pandemic. It is based on an in-depth survey of Airmic members and qualitative research.
The study shows that while most businesses had pandemic on their risk registers, the response plans were designed to cope with a localised disease rather than a global pandemic. Few had taken into account the speed and extent to which lockdowns were imposed, and in particular the near total ceasing of international travel.
With risk professionals taking a central role in managing the crisis, Airmic members are having more contact with boards and senior management and are more firmly embedded in organisational decision-making.
The Covid-19 situation is therefore an opportunity for risk professionals to demonstrate the strategic value of their work to their organisations, Airmic argues.
The report also highlights the impact of the pandemic on insurance buying trends. Even before the pandemic, the hardening market meant that a lack of adequate insurance cover at an affordable premium was emerging as a risk in itself.
Airmic warns that “an ill-judged response to the pandemic” could trigger a flight to alternative transfer options, including captives. The association urges insurers, brokers and insurance buyers to work together openly and constructively, particularly during the Covid-19 crisis.
“The report clearly shows that risk professionals who can combine agility with effective leadership will respond most effectively to the challenges of returning to business as we emerge from the lockdown,” comments Julia Graham, Airmic’s deputy CEO and technical director. “Risk professionals have been rising up the corporate ladder for some time, and now is a vital period for seizing opportunities. It is the time to innovate, not retreat – both for organisations and individuals.”
Produced in collaboration with AIG, Control Risks, KPMG, QBE and Willis Towers Watson, the report also offers guidance on how to navigate five risk megatrend areas in the context of the global pandemic. The megatrends are: cyber & technology; climate & environment; trust & reputation; geopolitics & populism; and governance, laws & regulation.