Members told to prepare for ‘disorderly shakeout’

Airmic CEO Julia Graham summed up how many of us are surely feeling as the world tentatively attempts to return to normal, during her speech at the association’s conference in Brighton this week. “Our world is spinning faster and the velocity of change can make us feel dizzy,” Graham told the audience. Very fitting words given the rather strange feeling of being at a large public gathering for the first time in two years, and worrying about whether you would have enough petrol to make it back home afterwards! We are indeed living in a fast-changing environment currently and seem to be bombarded with more dramatic news as each day passes. Whether that’s pandemic-related, another natural catastrophe, supply-chain strains or cyberattacks. The temptation to just sit and watch the shifting environment and wait for the next turn of events before making a decision is natural. And, as Graham hinted in her speech, the option to impersonate a rabbit staring into car headlights is big urge at such time. But, as we all know, rabbits that sit and stare at headlights do not tend to last very long, and those businesses that fail to respond to this rapidly changing environment won’t last long in the difficult economic environment we all face. The bottom line is that the response that repurposing organisations of all shapes and sizes, as well as governments, need to take at this point in time has to be risk- and evidence-based as far as possible. This is no time for making decisions based on gut instinct. Enter the risk manager and representative associations! “Airmic’s relevance has never been greater and our members, partners and other stakeholders have never been more important. We have an opportunity to collectively influence the future,” said Graham. “Over the past year, the business landscape has become more precarious. While many businesses have innovated and adapted to rapidly-changing circumstances – seizing market share in the process – not all have. Nor will all benefit or even survive as we travel the rocky road to economic recovery,” she continued. “Businesses must be ready for a disorderly shakeout – and they will need to strengthen and constantly review their purpose and strategies to improve their resilience to future shocks. Because the one thing we can guarantee is that there will be future shocks,” warned Airmic’s CEO. The core focus of all organisations and their risk managers at this time of flux has to be on two elements: the impact of technological change on the underlying business and how business is carried out; and the enormous impact of climate change on all aspects of business, politics and life in general. These two interlocking streams are dominating the political and business agenda. Airmic members and their peers across Europe need to be ready to take up the challenge and push the insurance sector to keep up and play its full role. “The UK is one of the most dynamic global centres of innovation, disruption and technological development. This should influence the insurance industry value chain. Technology opens up new opportunities to close protection gaps, and the insurance sector needs to keep relevant and affordable – our members want to place their trust and develop relationships in the industry,” stated Graham. “The right data, powered by artificial intelligence, used by data-savvy professionals, and the increasing digitalisation of insurance, will play a role in grabbing opportunities, providing new digital-fuelled insurance solutions – and fulfilling those member expectations,” she continued. Graham quite rightly stressed there is growing recognition that digital transformation and adoption can make all the difference between future success or failure. This is particularly critical given that many risks are closely linked and can no longer be dealt with in isolation. From a risk management perspective, enterprise risk management has therefore never been more needed. From an insurance perspective, it really is time to rethink the model, the nature of the contract and whether or not the industry is ready and willing to play a significant role in this new world. Above all perhaps, organisations such as Airmic need to lead the charge on education and thought leadership, to ensure we have the right people in place to take up the challenge. “Confidence is increasing and organisations are thinking about risks beyond the pandemic: cybersecurity, regulatory, tax and supply chain risk, as well as environmental, social and governance issues, are all top of mind,” said Graham. “Organisations are accelerating new digital business models, revenue streams and seamless digital customer experiences. However, there is a widening gap between the demand for innovation and the available talent to meet that demand,” she warned. And as the world waits to see what happens at COP26 in Glasgow, Graham took the chance to remind Airmic members of the significance of this moment, which we all need to take very seriously indeed. “Last week, the Environment and Society Programme of Chatham House, the policy institute, published a new report – Climate Change Risk Assessment 2021. The conclusion that the risks are compounding and, without immediate action, the impacts will be devastating isn’t new news. But the greatest concern is the interconnections between shifting weather patterns, resulting in changes to ecosystems and the rise of pests and diseases. Now I don’t want to pour cold water on this conference, but risk is our game. So let’s all pledge to commit to working together to make a difference. I think we can,” she concluded. So get out there, share your expertise and knowledge, and make a difference!

Members told to prepare for ‘disorderly shakeout’

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