COVID-19 has highlighted the growing need for companies and authorities to find ways to mitigate risks, either by strengthening supply chains or promoting "risk masters", say industry experts.
Several reports indicate that infectious disease or pandemic is a critical concern among managers and greater focus on risk management is needed if organizations are to be ready for the next unknown global outbreak, they say.
With the world more risk-adapted, there is "an opportunity to use attention and find more effective ways to identify and communicate risks to decision-makers," according to the World Economic Forum's Global Risk Report 2021, published January 1
Lessons from COVID-19 offers an opportunity for relief, including positioning "risk masters" "Before" the crisis of the next crisis ", the report says.
Investing in high-profile risk managers can bring together different stakeholders to promote innovation in risk analysis, financing and response, and improve relationships between scientific experts and political leaders, the report says.
Risk manager roles should be present in all companies, says Colleen Zitt, risk manager for Zurich North America in an interview with Business Insurance . It takes "risk managers to think ahead", said Zitt.
Even with risk masters in place, "the importance of leadership's attention to risks at the highest levels in business and government is not declining at all ", According to the WEF report.
The formulation of analytical frameworks that take a holistic view of the risk effects will help to strengthen the resilience of countries, companies and the international community to future events, the report says.
As much as risk managers focus on program structure and how markets harden, it's important to consider how risk can be cascaded across the organization, says Reid Sawyer, Chicago-based head of the Emerging Risks Group of Marsh Advisory, a Marsh unit. LLC, in an interview with Företagsförsäkring .
The organizations that have managed the pandemic best were those that had the "highest degree of expectation and planned for these types of events, not only in the way they were structured ring programs but more importantly in putting resilience mechanisms in place in advance, Said Sawyer.
It is important to have resilience mechanisms in place that enable the organization to respond to the largest number of potential shock events, he said.
COVID-19 is a reminder that not all hazards are insured, and that risk management and continuity planning play an important role in helping companies survive extreme events, according to the Allianz Risk Barometer 2021, which was also released on January 19. The report was based on a survey of 2,769 experts, including Allianz clients, brokers, industry organizations and staff, from 92 countries and territories, conducted in October and November 2020.
Business interruption was the highest ranked glob ala risk, followed by pandemic outbreak, which rose 15 positions from last year to second place, while cyber incidents ranked a close third, said Allianz Global Corporate & Specialty SE in Munich, in the report.
The pandemic has shown that business disruption is highly correlated with many of the risks most concerned for organizations such as natural disasters, climate change, market change and cyber, the report found.
"We're talking about non-physical damage to business interruptions that happen with cyber and power outages, and now the pandemic is part of it," said Thomas Varney, Chicago-based Regional Risk Advisor, North America, at Allianz Global Corporate & Specialty SE  Given the interconnected landscape, business continuity planning needs to become more holistic and dynamic, with companies taking an approach that develops alternative or multiple suppliers and invests in digital supply chains, Varney said.
For example, the step towards greater digitalisation has accelerated with COVID-19, which is reflected in the increase in teleworking, says Varney. "How to protect data when people work outside their office environments and when cyber attacks increase is something to keep in mind," he said.
How companies and communities use data insight will be the key to the future, Zitt Zitt said.
"Data can be something for us as a solution and asset, me n we must ensure that we have a balance in how data and insights are used for the benefit of society and for the targeted good risk management, "she said
More insurance and risk management news about the coronavirus crisis here .