In a risk-filled world, what are the worrisome problems keeping business leaders up at night? To get the answer to this question, The Graham Co. conducted a national survey of 300 senior business leaders to find out exactly what risks concern them most and what they’re doing to protect their organizations.
The survey revealed that nearly three-quarters of business leaders are most concerned about potential risk associated with healthcare cost increases and cybersecurity threats to their organizations. Sixty-four percent of respondents felt that their organization was either very well prepared or fairly well prepared to address the risks associated with rising healthcare costs, and 83 percent of respondents felt the same way about employee safety in the workplace. However, only slightly more than half of respondents regularly consult with an insurance or risk management expert to review plans for mitigating risk or completed an IT, network or cybersecurity audit within the past two years.
It’s a classic case of perception versus reality. Business leaders perceive that they are taking the adequate measures to protect their organizations, but in reality they’re falling short of doing what’s necessary to mitigate the risk associated with these potential threats.
Why is this the case? Very often, the problem is poor execution. The policies and procedures they have in place aren’t being carried out and followed by the people they were designed to protect. The reason for this is because there’s a disconnect somewhere along the lines of communication within the organization.
Risk Management Solutions
You might be wondering how you can overcome this challenge with your clients. While a risk management plan for each company is different, you can make some headway by doing the following:
Communicate Regularly: Whether you’re an in-house risk management professional or a consultant, making sure you routinely (e.g., weekly or monthly) have check-ins with the powers that be has multiple benefits. These benefits include helping you get ahead of any potential risk factors that would otherwise go unnoticed and getting buy-in from influential decision-makers regarding new policies and procedures.
Hone and Optimize: When it comes to insurance and risk management, a set-it-and-forget-it strategy won’t work. There is no one-size-fits-all approach, so you need to make sure you’re shifting your company or client’s approach from passive and general to proactive and specialized. One of the best ways to do this is by regularly (e.g., quarterly or bi-annually) evaluating your risk management program and finding ways to strengthen it.
Enhance the Existing Insurance Program: Since there hasn’t been a large amount of catastrophic losses this year, insurance carriers are profitable and their risk appetite is broadening. If a business has favorable loss experience and modest growth in the exposure basis, you should see rates flatten or even decrease over the next several months. This is a great opportunity to fill in gaps in coverage and negotiate favorable terms for cyber liability policies and other forms of coverage that weren’t as readily available a few years ago.
In the modern-day business environment, everything is interconnected and the amount of potential threats facing companies is constantly growing. The complexity of these risks can be overwhelming and sometimes cause business leaders to not take the appropriate actions to mitigate the impact of these potential threats – or, worse yet, assume that the measures in place will do just fine.
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