WAKE UP CALL TO ORGANISATIONS AS CONTINUITY PLANS FALL SHORT
Many enterprises think they are better prepared for a crisis than they really are, the AIRMIC annual conference heard today. As a result, they run a risk of disappearing altogether in the event of a really big incident.
80% of firms hit by a major disaster go out of business, according to Dennis Murphy, Head of Risk Consultants at Allianz Global Corporate & Specialty. Many of those that do continue never recover their previous stature. Yet, with the correct planning, the most serious problems can be anticipated and overcome, greatly increasing corporate resilience.
“Many people don’t understand what a business continuity plan is,” he said. “They may have emergency plans in place, and think that’s enough, but you need to go much deeper than that. You need to look beyond the first 48 hours.”
“People think they’re covered for business continuity when they’re only covered for business interruption.”
Customer retention is a key element of business continuity planning that is often overlooked, with people going elsewhere and never returning in the event of supply disruption.
“If you lose a customer through business interruption, there’s no guarantee you’ll get them back. We can replace your buildings and your hardware, but its less easy to rebuild your reputation,” Murphy said. He urged corporate customers to obtain advice from their insurers when considering creating a business contintuity plan.
“It’s in our interest to support you with your continuity plans. It can help to keep our customers in business and reduce our exposure to losses.”
AIRMIC represents nearly 1,000 risk managers and corporate insurance buyers, including 75% of FTSE 100 companies. Their annual conference, “Communicating Risk Management”, took place in Edinburgh June 17-18.
For further information, contact mark Baylis +44 (0) 7775 693994, mark.baylis@airmic.co.uk