Last month, several of our experts attended the FERMA Forum in Copenhagen. The theme was ‘Transitioning together: risk leadership in a fast-changing world.’ The event provided an opportunity to highlight trends around supply chain disruption, climate change, cyber concerns, claims digitization and more. Risk managers, brokers and insurers are navigating uncharted territory, so there’s a strong focus on resilience, sustainability and adaptability. As we prepare for 2023, let’s explore some key takeaways from the FERMA Forum.
Working together requires the alignment of a multitude of stakeholders, including corporates, (re) insurers, brokers and governments. For example, if a global industrial insurer does not cover coal mining or atomic power plants because it’s against their environmental, social and governance (ESG) policy and ecological values, what happens to those in the various countries that are impacted? Is it the insurers’ responsibility to make decisions based on political considerations? Whether we’re on the topic of inflation, the energy crisis or supply chain disruption, the challenges we face as a society, we face globally. Sharing intelligence and best practices helps organisations transition through uncertain risk environments.
Effects on risk management
Supply chain disruption, an economic recession, Brexit and the pandemic have all affected risk management. The last two years specifically have shown us how vulnerable we all are regarding supply chains. Adding to the overarching uncertainty, these factors are unquestionably challenging — impacting all aspects of what we do, from the way we work to the onset of remote technology. They’ve raised market volatility and increased instances of civil unrest. Additionally, experience has shown that in uncertain times, one of the ways targeted to compensate for lost revenue/income is fraud. We’ve started to see an increase in claims identified as suspect that warrant closer scrutiny – especially since the end of pandemic related to financial support from European governments. Risk has become a truly global concern as issues can no longer be isolated to a specific area or region i.e. the rising cost of food, political shifts, manufacturing delays, etc.
Shaping the future
The risk landscape is evolving and responding to an increasingly unpredictable and uncertain environment can be challenging. It’s more global, complex, interconnected and volatile than ever before. However, if we maintain a positive mindset it will continue to drive collaboration, partnerships and innovation. Working together with a global lens will give us strong capabilities to deliver change and enable us to transition successfully.
As organisations look to streamline their operating models to better respond to the rapidly fluctuating geopolitical and socio-economic environment, business process outsourcing (BPO) will become increasingly popular. Equally as relevant to insurers as it is to corporate entities is the outsourcing of business activities – from back-office administration to technical claims handling. This service frees up time and energy to focus on what the individual organisation does best.
The FERMA Forum presented an opportunity to renew existing relationships, engage with peers, learn from leaders, and understand avenues for growth. Now is as good a time as any to review how things are working in your organisation and what could be done differently to add greater value and insights. For more information about how to mitigate risks in 2023, visit our website.