Marriott Risk Management APAC director Sharon Xu has been in this line for eight years now. In that period, she, like so many others across industries, got to experience firsthand the devastating economic effects of the pandemic, and how businesses managed their rebounds as borders and restrictions were eventually lifted.
Previously, she talked about what’s changed since COVID, and how high-quality risks and better contracts should be standard in this new environment. In part two of her conversation with Insurance Business’ Corporate Risk channel, Xu shares some advice for companies in the hospitality sector, as well as fellow risk managers as we face new threats and risks in a post-pandemic world.
“For hospitality operators, I think there’s no material difference [now] to how we would operate the business pre-COVID, but I think people need to stay alert,” Xu said. “After three years, things could have changed a lot, be it customer behavior, client base, and even the conversations between customers. Maybe, in the past, in a certain country we have more foreign visitors; now these foreigners are picking up in addition to local visitors also going up.”
Further explaining that appetites may be different for foreigners and domestic travellers, Xu stressed the need for a fresh perspective to observe and understand customer behaviour.
“On one hand, that entails more tailored services for customers; on the other hand, I think we also need to learn how to deal with customers’ different requests. In a way, everything starts with customer behaviour, and everything ends with customer behaviour,” she said. “At the end of the day, we provide services based on the customers’ demands. I think this is something that’s not so prevalent across all hospitality companies.”
A changed environment also comes with a different set of standards, policies, procedures, and regulations. Xu said that evaluations should be in place to see how well they’re holding up in the current business environment, as well as how future proof they are for new challenges that have yet to reveal themselves.
“Coming from the insurance side, I think – and there’s no doubt – more claims will occur because we are servicing more customers. As these claims occur, I’m positive that we can also learn more from the resulting claims data as well. I think this is a good resource to understand how we can do better. Insurance, claims, contracts, operations – I think all of these are very much connected, and it’s the risk manager who is responsible for driving different functions within these fields,” Xu said.
There were many things that were highlighted by the pandemic as something that most of us take for granted. In a way, it’s communication that really stood out; with restrictions on where we could go and most people confined to their homes, communicating became a much more complicated affair. As someone who’s been in risk management for eight years – and even more years beforehand as a broker – Xu said that proper communication should be at the core of every risk manager’s handbook.
“My biggest takeaway of the past few years is that communication is really important. Sometimes, there’s technical stuff, but we can always go over these with our brokers; however, there’s still a need to translate the insurance language to non-insurance language, to communicate with our finance partners and business partners in a plain language so that they know the risks,” Xu said.
In a way, Xu said that one of the most challenging aspects of her role is a failure to communicate how serious certain risks can be. There are times when the risk is present, but because it’s not properly communicated, its severity is misunderstood – the result is a business side that would rather just push things through, unaware of the possible consequences.
“Ultimately, a risk manager’s job is to balance the different interests of the stakeholders and everyone else involved,” Xu said. “In most cases, there’s no wrong or right – in the end, everyone believes that they are making the right decision for their own respective roles. We’re just here to try and balance; when you balance risk versus reward, we try to call attention to whether the risk warrants the reward. Sometimes, a risk overweighs the reward – that will probably require you to think about whether this is the right decision to make. Communication and using the non-insurance language is pretty important.”
Not losing sight of what’s important is also integral for the role, Xu said. For risk managers, this means keeping a constant eye on the insurance sector and all the developments that come with it.
“Compared to me working with an insurance broker, us risk managers speak to the market every day through our internal business partners,” she said. “I think we should not lose sight of what the insurance market is developing towards. Knowing that, we could develop our own perspectives, ideas, and views regarding how the market is developing. Once you have formulated your own thoughts, it leads to the development of critical thinking that then leads to healthy discussions with our brokers and insurers.”
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