- Organisations caught off-guard by speed and impact of Covid-19;
- Risk professionals who can combine agility with effective leadership will respond best to the challenges of emerging from lockdown;
- Insurers at risk of flight to alternative risk transfer.
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 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.
Notes for editors
The full report, including the megatrend analysis, can be downloaded here.
Airmic is hosting a virtual seminar at 2pm on Thursday 9th July to discuss the report findings in more detail and take questions. The webinar is free and members of the press are invited to attend. Click here to register.
A summary of the megatrend findings follows, with contacts for more information:
- Cyber & technology: Individual and corporate exposure to cyber threats is expanding at a rapid rate. Artificial Intelligence techniques, while still in their infancy, are being utilised in more state and criminal operations for faster and harder-to-detect attacks. Targeting of operational technology is increasing as outdated analogue systems digitise and converge with IT networks at corporate headquarters. Written by Control Risks in partnership with Airmic. For more information contact: Felicitas Sommer – firstname.lastname@example.org
- Climate & environment: Businesses will bear the brunt of climate change. These will cause knock-on effects that will disrupt supply chains, impact staff, ultimately leading to lost revenues and reputational damage. Yet many businesses still see climate action as external to them – something for governments instead to deal with. For more information contact: Hoe-Yeong Loke – email@example.com
- Trust & reputation: Trust and reputation have become increasingly important to businesses. With the pandemic, all businesses and organisations have been placed under additional stress. One might think they may be more easily forgiven for their errors, but consumers continue to find many corporate transgressions unacceptable. Written by KPMG in partnership with Airmic. For more information contact: Olivia Shalofsky – Olivia.Shalofsky@kpmg.co.uk
- Geopolitics & populism: The nature of risks today, especially geopolitical risks, is that they are increasingly interconnected. Indeed, while much has changed, there is a surprising element of continuity in the geopolitical threats that companies face in the Covid-19 era. Written by Willis Towers Watson in partnership with Airmic. For more information contact: Sarah Booker - Sarah.Booker@willistowerswatson.com
- Governance, laws & regulation: Risks in relation to governance, laws and regulation continue to exhibit a significant level of concern for risk professionals and their organisations. Written by AIG in partnership with Airmic. For more information contact: Hannah Scott Hannah.Scott@aig.com
About the report:
The report was produced by Airmic in collaboration with AIG, Control Risks, KPMG, QBE and Willis Towers Watson. It is based on 150 responses gathered in a survey from 14 February to 31 March 2020. For context, this corresponded to the period when the COVID-19 pandemic was beginning to hit Europe, in particular with the first cases of infection in northern Italy until the end of the UK’s first week of lockdown. Subsequently, roundtables with Airmic members were held to gather qualitative responses. Written interviews were held with key representatives of the partner organisations.
The leading UK association for everyone who has a responsibility for risk management and insurance for their organisation, Airmic has over 450 corporate members and more than 1,300 individual members. Individual members include company secretaries, finance directors, internal auditors, as well as risk and insurance professionals from all sectors. Airmic supports members through: training and research; sharing information; a diverse programme of events; encouraging good practice; and lobbying on subjects that directly affect its members.
For more information or to request an interview, contact:
Jessica Titherington | +44(0)7733 261445 | firstname.lastname@example.org