Risk management requires a rethink. That was the conclusion of industry leaders during a recently held roundtable hosted by CNA Hardy.
Conducted in the run-up to BIBA 2019, the roundtable was attended by executives from AIRMIC, Capita, Marsh and CNA Hardy. The talks covered the implications of interconnected risks and industry bosses concluded that businesses, especially risk managers of these companies, need to relate to the world around them.
“In today’s interconnected world, no company is insulated from what’s going on in other parts of the world politically, economically or technologically,” CNA Hardy CEO Dave Brosnan said. “Tangible and intangible risk proliferate and that means risk management requires a rethink.”
“Interconnectivity brings blind spots that can cause problems and business failures,” Capita group head of risk management Jonathan Blackhurst noted. “If something has gone wrong, it’s not the tried and tested area of risk that problems will have come from, it’s something connected to the risk they thought they had protected against that has crept in below the risk radar. Today’s risk could come from a supplier, or an element of technology or a seemingly unconnected risk in the outside world that caused the issue.”
At the roundtable, Marsh UK chief client officer Ailsa King described how technology risk could impact the supply chain. She emphasised that businesses are still reliant on large container ships to move goods around the world.
“When these ships dock in harbours the majority of unloading is now automated and tech driven,” she explained. “If something goes wrong with the technology, this can create supply chain risk as goods won’t reach their specified destination in the expected timeframe. So, there are still traditional marine and cargo risks, but the tech liability and supply chain risk are new.”
Meanwhile, CNA Hardy head of international solutions Jason Beelders said the world is becoming smaller and regulations are becoming much more aligned across territories – as seen in more connected regulations across Africa and the Middle East.
“Too often, risk managers and insurance buyers seek to address tangible property exposures at a local level and then address the less tangible tech and liability exposures on a remote basis, usually to save money and admin,” Beelders added. “Leaders of businesses with an international footprint need to think about protection in the round, the pre loss planning and risk mitigation solutions that are required, not just the financial risk transfer, in order to address the borderless challenges posed by interconnected risk today.”
Brosnan, Blackhurst and King were also joined by AIRMIC CEO John Ludlow and CNA Hardy VP of international specialty Rhona Beuge at the industry roundtable.