Global risk: Preparing for the unexpected

Global risk: Preparing for the unexpected | Insurance Business

Global risk: Preparing for the unexpected

by Jacob Reeleder

How would your organization react if your people or facilities overseas suddenly had to deal with a totally unexpected risk or incident?

Many global organizations prepare for expected risks, such as weather and health, but there are still situations that companies are unprepared for. This is especially true in areas that are thought to be safe, but unexpectedly turn volatile due to social unrest or an external event inciting a local religious or cultural group.

So, how can organizations prepare for unexpected risk?

In their recent case study, which you can download here, WorldAware describes how it was able to help university students who became stranded in Nicaragua during an unexpected period of civil unrest.

We sat down with WorldAware to discuss how other organizations can similarly prepare for, monitor, respond to and overcome global risks to keep personnel and facilities as safe as possible.

Monitor your threat environment
To be ready to respond to changes in the threat environment or sudden events, it’s important to be aware of the possible threats that could impact your people or operations. High probability threat areas include weather and environment, health, security, transportation, and legal. But there are other areas where problems can pop up.

WorldAware keeps an eye on all the above threat categories, but also looks at entry and exit requirements, communications and technology, culture, and financial issues that may present current or future risk.

“Local laws can change that may impact an organization’s personnel or business,” WorldAware explains. “Likewise, there can be major cultural events, such as a highly charged football or cricket game or major local food festival, that could pose potential risk.”

Assess, plan and test, even for less frequent risks
Given that an organization needs to address the full spectrum of possible threats to their assets across all the locations in which they operate, the magnitude of the effort can be overwhelming.

WorldAware goes on to explain that, because of the effort required, most organizations are not prepared for all threats and hazards. In many cases, the organization does not even know where to start or may miss major threats just because no-one thought about them. And, even if the organization does a good job of preparing, periodic testing and updating of plans is sparse or non-existent.

“Less frequent events like infectious disease, workplace violence and geopolitical risk tend not to be addressed and definitely not exercised,” WorldAware explains.

Assessing risk, creating a plan, and testing the plan’s effectiveness are all key steps in keeping personnel and facilities safe.

So, how can organizations go about planning?

See how WorldAware implemented their plan here

Key steps to prepare for risk management
WorldAware identifies several key steps in preparing global operations.

“Before sending people to or setting up an operation in a new location, an organization needs to conduct a location risk assessment. This assessment would look at all the threats and hazards that are present in the location and create a risk profile for each of the asset types that will be deployed,” says WorldAware.

The first step is to understand the potential threats. This is not easy to do and takes both research and imagination around what is possible.

Once the threat environment is defined, then each threat must be evaluated on likelihood and potential impact to the organization. High likelihood, high impact threats should be addressed first. Plans and procedures need to be developed and ideally tested to prepare for that eventuality.

A test can be a full up exercise, mobilizing both personal and materials as if the incident actually occurred, or simply a table-top exercise where each person or group thinks through what might happen and what they would do to effectively manage the issue.

Organizations also need to gather intelligence on the intrinsic and dynamic threats within a region based on historical incidents and potential sources of threat such as activists, terrorists, and labor groups.

Intrinsic threats are present in the location all the time, such as crime, kidnap or disease, where the likelihood and severity of the threat do not change quickly. These can be evaluated and incorporated more easily into your risk assessment. And, because they are present over a longer period of time, an organization should invest in standing mitigation strategies such as fences, video monitoring and guards.

Dynamic threats tend to deviate from the intrinsic threat baseline and can include things like active shooters, floods, or civil unrest like the WorldAware case study in Nicaragua explained. Since these threats are only present for a short duration, the organization needs to be able to quickly respond

with enhanced mitigation strategies such as sand bags for flood or enhanced auto inspections and then shut them down when they are no longer needed.

And while dynamic threats can be more difficult to anticipate, WorldAware explains how intelligence gathering can help:

“In many cases, dynamic threats can be identified before they occur by monitoring indicators such as the forming of a severe weather front or a growing increase in infectious disease,” it explains. “This is referred to as warning intelligence. This is the highest value intelligence as it lets the organization prepare in advance or avoid the risk all together.”

Once all of this risk assessment is developed, organizations should create a series of “playbooks” for both early warning preparation and incident response/recovery. These documents address individual risk areas and clearly define what should be done to avoid or minimize the impact of these sudden impact events.

Acting on warnings
Preparing and testing a risk assessment plan are all part of the first step. But, once these systems are in place, knowing how and when to act on warnings can still be a challenge.

Warning intelligence is a result of indicators reflecting a likelihood that the threat will manifest into an incident. WorldAware recommends a three-level alert system that enables organizations to have a more consistent process for knowing when to take action.

1. For an Informational level alert, the client should activate their organizational awareness playbook. That is, be aware of the developing situation, but immediate action is not needed.

2. A Warning level alert should trigger the organization to evaluate the threat, “lean forward” and activate the preparation or pre-incident playbook.

3. Finally, a Critical level alert indicates that the threat is imminent and the organization should be prepared to respond, or the threat has occurred, and the organization should activate the response playbook.

For example, the forming of a tropical depression in the Atlantic is informational level; an activist group preparing for a major protest is Warning level; a fire at a factory that could generate an explosion is Critical level.

When an organization receives warning intelligence at any time of the day, they immediately need to assess the relevance of this warning to the organization and/or its people. This can be automated through a risk management system such as WorldAware’s Worldcue platform or performed manually. By registering all the operating locations that are important to the organization such as offices, suppliers, projects, and residences and knowing the general location of an organization’s people, a system can quickly determine if any of the organization’s assets could be exposed.

Once these warnings are assessed, an organization’s playbooks come into action. By directing personnel to the pre-incident playbook, or plan, designed for a specific type of warning, organizations may be able to avoid, or at least minimize, the impact of the potential threat as described above.

Be prepared for emerging risks
Even if you create and perfect your plan while setting up operations, it’s important to keep monitoring for new threats, even in locations where it’s believed there is little risk as new threats can arise.

WorldAware sees this situation often.

“There are many examples where the threat environment is changing slowly over time and the local staff may not be aware the threat level is creeping up and they have not re-evaluated their mitigation and response plans/procedures,” it states.

For example, climate change represents an evolving threat for coastal locations, as well as other areas that can or are seeing more extreme weather events. Social unrest is another threat that can change slowly whether due to increasing immigration or internal sectarian divides that eventually boil over into significant social unrest.

Creating a risk assessment plan and preparing a series of playbooks can help to mitigate risk in your global operations and facilitate response in an effective and timely manner when things do go wrong. Gathering intelligence and constant monitoring of the threat environment are also critical, as it’s impossible to accurately predict all risks.

Understanding how to approach sudden impact events can keep your personnel safe and operations running.

Download the case study here to see how WorldAware has mitigated risks and implemented a rapid response planning process that helped bring one university’s students home.