{"id":96144,"date":"2022-11-30T11:57:43","date_gmt":"2022-11-30T11:57:43","guid":{"rendered":"https:\/\/www.commercialriskonline.com\/?p=96144"},"modified":"2022-11-30T11:57:43","modified_gmt":"2022-11-30T11:57:43","slug":"preparing-for-the-storms-ahead-belfor","status":"publish","type":"post","link":"https:\/\/www.commercialriskonline.com\/preparing-for-the-storms-ahead-belfor\/","title":{"rendered":"Preparing for the storms ahead"},"content":{"rendered":"

Many risk managers feel they have been in firefighting mode for the last two years, struggling to stay ahead of one crisis after another. Reporting risks is no longer enough. It is critical that risk managers are able to prepare for risks before they happen.<\/p>\n

While new risks have emerged in the recent years, traditional risks have also increased. In the last five years, insured losses from natural catastrophes have resumed a long-term growth rate of 5% to 7% annually, following a benign phase of lower annual losses in the 2012-2016 period.<\/p>\n

At the same time as a rise in natural catastrophes, risk managers have also had to deal with a hardening insurance market and all that brings \u2013 a rise in premiums and exclusions and a reduction in capacity and coverage. This confluence of risk factors was discussed at the recent Swiss Association of Insurance and Risk Managers (SIRM) Forum, held in Bern.<\/p>\n

Dirk Wegener, president of the Federation of European Risk Management Associations (Ferma), spoke of the need for more urgent action to tackle climate change. His call for urgency was supported by another speaker at the event, prominent Swiss meteorologist Gaudenz Flury.<\/p>\n

\u201cThe global temperature has gone up by 1.1% since 1850, a higher and faster increase than at any time in the past 100,000 years,\u201d he noted.<\/p>\n

The situation is even more serious in Switzerland, where the temperature has risen by 2% since 1850. The country has seen more intense and frequent rainfall, a greater number and severity of heatwaves, less snowfall, receding glaciers and longer vegetation periods.<\/p>\n

Lack of capacity<\/strong><\/p>\n

One area where the lack of capacity is conspicuous is business interruption (BI). Not only has coverage declined but the likelihood of long business interruptions has increased. For example, the cost and waiting times for replacing machinery have both increased; the availability of spare parts has declined, as has the number of skilled mechanics and mechanics in general.<\/p>\n

And the lack of insurance will itself make recovery from BI much more difficult.<\/p>\n

The concerns around BI were evident in the floods that wreaked damage on households and business in Switzerland and neighbouring countries in 2021. The lack of restoration companies, insurers and other service providers was exposed for all to see, contributing to the commercial trauma experienced by so many small and medium-sized enterprises.<\/p>\n

Consequently, the floods also showed why risk managers must try and get ahead of the crisis and how a solution like BELFOR\u2019s RED ALERT<\/strong><\/a> is of critical importance in today\u2019s market.<\/p>\n

As one senior risk manager said: \u201cIt seems that we are always struggling, always in firefighting mode, always trying not to drown, always in the middle of the storm. We need to prepare for foreseeable challenges and risks before they happen. We need to get ahead of the wave. Only reporting risks is not enough.\u201d<\/p>\n

BELFOR\u2019s RED ALERT service is structured to work alongside companies\u2019 response plans and emergency procedures so that recovery can be more rapid and effective, and that any gaps in business continuity plans can be minimised.<\/p>\n