An ill-judged response to the COVID-19 pandemic could trigger a flight to alternative transfer options such as captives, according to Airmic, the UK association for risk and insurance professionals.
In a report based on an in-depth survey of Airmic members and qualitative research, titled Top risks and megatrends 2020, Airmic identified the biggest risks facing UK organisations today.
It warned that the hardening market was an emerging risk in itself, making it difficult for companies to secure adequate insurance cover at an affordable premium. A worsening of the situation could force more companies to turn to captives, it warned.
Airmic urged insurers, brokers and insurance buyers to work together openly and constructively, particularly during the COVID-19 crisis.
Airmic noted that risk professionals are getting more attention from their boards than ever before as the disruption from the COVID-19 pandemic erodes internal organisational barriers.
While most businesses had the risk of a pandemic on their radars, their response plans were designed to cope with a localised disease rather than a global pandemic, Airmic said. Few had taken into account the speed and extent to which lockdowns were imposed, and in particular the near total ceasing of international travel.
The crisis has thrust risk professionals into a central role in their organisations, Airmic said, with its members increasingly firmly embedded in organisational decision-making. The COVID-19 situation is therefore an opportunity for risk professionals to demonstrate the strategic value of their work to their organisations, Airmic said.
“The report clearly shows that risk professionals who can combine agility with effective leadership will respond most effectively to the challenges of returning to business as we emerge from the lockdown,” said Julia Graham, Airmic’s deputy chief executive and technical director. “Risk professionals have been rising up the corporate ladder for some time, and now is a vital period for seizing opportunities. It is the time to innovate, not retreat – both for organisations and individuals.”
The report was produced in collaboration with AIG, Control Risks, KPMG, QBE and Willis Towers Watson.