Protecting your Business in the ‘New Normal’
Businesses around the world are experiencing unprecedented times. Challenging times created by various global factors – not least COVID-19 – have applied particular pressure on sectors like manufacturing and logistics and really continue to test their resilience.
For many businesses in the Middle East, obtaining insurance has been a somewhat arbitrary act. Now, in the midst of a global pandemic, international economic flux, and evolving risk landscapes, businesses find themselves confronted with the true value of risk management.
According to the World Economic Forum report COVID-19 Risk Outlook, written in partnership with Marsh & McLennan and Zurich Insurance Group, lockdowns seen in 120 countries to contain the virus have “triggered an economic crisis with dire societal consequences, affecting the lives and livelihoods of most of the global population”.
The COVID-19 Risks Perception Survey on which the report is based outlines the risks that senior risk professionals around the world are finding most concerning. When assessing the “most likely fallout for the world”, the “greatest concerned for the world”, and the “most worrisome” for companies, prolonged recession of the global economy topped all three lists. Both the surge in bankruptcies and cyber-attacks and data fraud also featured in the top three of key concerns for companies.
With these challenges on the horizon, building resilience has become a priority for many companies.
Looking beyond traditional insurance procurement, managing risk could help protect your balance sheet during times of crisis. The extreme nature of the COVID-19 crisis emphasised this fact, as firms that had not managed their risks adequately experienced turbulence. Indeed, after global lockdowns and significant societal disruption, the business landscape has changed forever, with many established firms struggling to cope with these unprecedented times or having to exit.
In many cases, those that have survived have had to pivot to new offerings and services. The need for local manufacturing is heightened, and some manufacturers have paused products they have made for decades and taken up the production of personal protective equipment (PPE). Transport companies and warehouses may also be handling goods they have not previously dealt with. Given the shift of business operating models, it is essential to understand the risks associated with these new business streams – as well as how to manage your risk and risk transfer.
Lean on specialists like your broker for knowledge and support on your new path to success. In our Value of the Broker series, Marsh will provide you key areas to consider in your risk management. In this series, we will provide insights to help you assess the road ahead and build resilience.