Aviva Canada executive on what’s needed in risk management
Aviva Canada executive on what’s needed in risk management | Insurance Business Canada
Insurance News
Aviva Canada executive on what’s needed in risk management
“The effort doesn’t reflect the mindset”
Insurance News
By
Gia Snape
An insurance executive has warned that Canadian businesses may not be doing enough to boost their resilience as they face a range of risks today, from supply chain delays, inflation, and economic volatility to cybersecurity and talent shortages.
Aviva Canada’s second annual risk insights report found more business leaders are aware of the critical need for risk management and business continuity planning amid persistent challenges and uncertainty.
But Urs Uhlmann (pictured), managing director, global corporate and specialty at Aviva Canada, believes leaders can do more to bolster their organization’s resilience against risks, and that brokers should lead conversations on continuity planning.
“I think there is still somewhat of a disconnect between what is said and what actually is being done,” said Uhlmann. “There is still an opportunity for many businesses to execute [risk management] with more vigilance.”
“I don’t think the effort we are seeing in some of our customers quite reflects that mindset,” Uhlmann said.
Though many businesses have some form of continuity planning, for example, few have processes in place to review those plans on a regular basis.
“Amid high inflation and a potentially recessionary environment, you must look at your business plans continuously and change them. This happens more so in the large corporations that have dedicated risk management departments,” said Uhlmann.
“But the smaller the businesses get, the more demanding it gets for them to find the time and resources for risk management and business continuity planning.”
Additionally, Aviva Canada found the number of companies undertaking risk assessments is declining, which puts them at further disadvantage in the event of a loss. Leaders said they lacked the knowledge and resources to make those critical assessments, and were instead prioritizing business growth, cyber security, environmental, social and governance (ESG) issues, and supply chain management.
What are the top five risks concerning Canadian businesses?
According to the Aviva Canada survey, the top risks for Canadian businesses are:
Economic uncertainty
Business interruption
Public health events
Shortage of skilled workforce
Inflationary pressures
Business interruption was the biggest jumper in this year’s list, rising to second place from fifth last year.
Other risks that made last year’s list – cyber security, mental and physical health among employees, and extreme weather events – have slipped as perceived threats. This could leave organizations unprepared and open to disruption, the report warned.
For Uhlmann, it makes sense that businesses are more keenly attuned to the risk of disruptions, particularly after the COVID-19 pandemic.
“The business interruption category wraps a lot of major risks into one without particularly naming the underlying risk,” he told Insurance Business.
The largest businesses surveyed emphasized sustainability, cyber security, and technology and IT investments among their biggest concerns.
Small businesses, meanwhile, are still reeling from the pandemic, and are focused on weathering the economic storm clouds amidst rising costs.
“Preparedness can have a massive impact on businesses getting back up to their feet,” Uhlmann said. “But first, [business leaders] need to conclude that this is an issue they should care about. Then they can start figuring out how going to address it in a more effective way.”
Significant opportunity for brokers
According to Aviva Canada, its data shows businesses are finding it challenging to navigate forward into an even more uncertain world post-pandemic. This presents a clear opportunity for brokers to step into the integral role of ensuring businesses are protected.
“We have several tools that can help businesses establish better continuity plans or other risk management measures, and we’ve certainly seen an uptick in the demand for help,” said Uhlmann.
Renewal periods are a great time for brokers to bring up how a company’s priorities and values have changed, and how their risk management and continuity plans should adapt.
“There’s a big opportunity for brokers to show that there is extra value in the relationship [with clients]. A broker can prompt the right questions. It doesn’t need to be an elaborate, complicated exercise,” Uhlmann added.
Do you agree with Aviva Canada’s assessment? Tell us your thoughts about the biggest risks Canadian businesses face.
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