Overcoming risk blind spots for a real estate firm

The challenge

A large Australian firm in the real estate industry was focused mainly on its financial and treasury risks, driven by the absence of robust enterprise risk management (ERM) framework. This low ERM maturity level created gaps in risk visibility in specific areas and heightened the risk of control failures.

The solution

Marsh’s Advisory Strategic Risk team undertook a comprehensive risk and controls review using our Risk Focus Process to assess and categorise the organisation’s major risks based on potential severity, evaluate the effectiveness of the existing risk management strategy and practices, identify gaps in insurance coverage, and support improvement of the insurance program based on identified risks.

The Risk Focus Process involved five key steps:

1. Due diligence and data collection to understand the company’s risks based on risk documents and insurance data to develop key objectives.
2. Context-setting interviews with key personnel to identify critical risks and pain points, review existing risk management processes, and establish risk evaluation criteria.
3. Facilitated workshops with the company leadership team and others to review key insurable and non-insurable risks and risk categories, in addition to creating scenarios to evaluate the risks and assess the effectiveness of existing controls.
4. Analysis and report development as part of an insurability analysis.
5. Recommendations presented to key client leaders and stakeholders, including a review of key findings and next steps.

The results

The company gained a better understanding of its insurance program and its identified insurable vs non insurable risks, and clarity on where to focus risk management investment. For example, the review resulted in 19 new risks being added to the firm’s risk register, of which 17 were not covered under its existing insurance program.