More data on property risks means more informed decisions
As a risk manager, you want to protect your business properties and assets as effectively and efficiently as possible. That means making well-informed decisions based on as much useful data as you can gather.
To make informed decisions about risk, you need two things. First is the raw data. What are the potential problems? What is their likelihood of occurring? What will be the impact if they do?
The second is the means to analyse that data in order to identify priorities, achieve the best results from your risk management budget and deliver your loss prevention strategy.
The challenges of data collection
Let’s look at the raw data first. Collecting this information for a company’s property risks will generally require a risk assessment for each site – a formidable proposition for multinational businesses with a variety of premises being put to a range of uses across multiple countries. In fact, for many businesses, assessing every site is virtually impossible, given the hours and costs that would be involved.
As a result, risk managers will probably be prioritising their sites for assessment. When doing so, it’s easy to be distracted by solely considering total insurable value – placing the highest-valued sites at the top of the list. In fact, a more focused approach is to carry out a business impact analysis – identifying those sites that are the most critical to a company’s ability to do business. A small site that is the sole producer of a component used by the largest factory is a strong candidate for close attention and a comprehensive assessment.
Ultimately, you will have to take a practical and pragmatic approach to gathering the data needed. For many businesses that means a rolling programme of assessments, with high priority sites visited more frequently. The goal is to ensure that you have your finger on the pulse and can react quickly to changing circumstances, such as new processes being introduced or the development of existing or new locations.
The challenges of data analysis
Now let’s look at the second aspect of informed decision-making – analysis of the available data to gain insights and draw conclusions.
For data gathering the challenge is one of scale, for data analysis it’s one of consistency. Even if the risk manager could arrange a visit at every site, cultural, legal and economic differences mean it can be difficult to be sure that the risk manager is comparing like with like when it comes to the information gathered.
The best way to overcome this is to find a risk engineering provider with a proven, trusted methodology and the scale to deliver it consistently across all of the territories in which a company has property risks. With this foundation in place, data analysis can be done with confidence.
Analysis is where the risk manager will drive value from the data gathered. Benchmarking the sites against each other – whether by function or location – will help the risk manager to:
• identify good and bad trends
• learn from sites that are performing well and spread best practice
• drill deeper into the causes behind poor performance.
With these insights the risk manager can prepare a risk management strategy that is based on informed decisions and that supports the wider business strategy. This will likely include both quick wins (our customers often ask us to prioritise risk improvement actions by both impact level and cost to implement) and mid- to longer-term activity that will help the risk manager achieve demonstrable year-on-year risk improvement and measurable delivery of the risk management key performance indicators.
Helping corporations
Zurich have developed an app that enables risk managers and site managers to carry out self-assessments of property risks, using Zurich’s proven risk grading methodology. This not only makes it more practical to carry out assessments across all sites, it also ensures that the results are directly comparable. By giving a grading to each risk at each site, Zurich Risk Advisor gives a clear, consistent picture of property risks across the business and enables our customers to benchmark them quickly and easily.
Zurich Risk Advisor guides you through exactly the same questions as a Zurich Risk Engineer would use when assessing the site and are based on our extensive experience built up globally over many years.
Once the assessment is completed, then Zurich Risk Advisor rates each risk factor and recommends risk improvement actions based on best practice.
Some of Zurich’s largest customers are benefiting from the time and cost efficiencies of Zurich Risk Advisor, and we’ve found that training our customers’ site and plant managers to use the app has also helped to raise awareness and spread the risk management culture across the business.
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