How to navigate complex risks in an ever-evolving landscape

~ Courtesy Santam

There is no mistake that the world is changing rapidly. The rate of climate change is powering increasingly adverse weather events, the changing world of work has supercharged cyber threats, and some countries are planning on building volcano powered crypto cities to help futureproof themselves. In this kind of environment, knowing how to navigate the complex nature of risk is a vital part of any businesses’ plans to remain future-fit.

Given the surge in new and complex business risks, it is advised that companies take out insurance cover that protects them adequately against events and perils that could harm their operations.

Santam suggests that companies who want to navigate today’s, and tomorrow’s complex risks try the following tips:

KEEP UP TO DATE WITH CHANGING RISK AND PRODUCT ENVIRONMENTS:

Part and parcel of mitigating one’s risks in the current landscape means understanding what risks affect your particular business and what insurance solutions are available and appropriate to protect your business. For instance, a security consultancy will probably have little need for drought insurance but would really benefit from Cyber insurance.

Here are some examples of recent developments to consider:

• Cybercrime costs South Africa R2,2 billion per year, and it can cost small businesses anywhere between R50 000 and R250 000 to recover from cyberattacks. Any business that uses some type of digital technology is vulnerable to such attacks and should consider its data and system risk management protocols as well as protection provided by Cyber insurance.
• Climate change is one of the major issues of our time. Across the country we are seeing its effects in the form of floods in KwaZulu Natal, fires across the Western Cape and droughts throughout the central regions of the country. These events can affect a range of businesses and, as such, it is crucial to be in touch with your insurance broker to ensure every potential angle of risk is covered.
• The accelerating rate of change , both technologically and systemically, has resulted in significant changes in our behaviour and has had a profound impact on the insurance industry. In some instances, for example, where risk has decreased as many people now work from home and spend less time in their cars on the road, it has led to innovative insurance products like SmartPark, a distance-based vehicle insurance benefit that uses Artificial Intelligence and machine learning to determine a client’s insurance premium based on how much he or she drives. Clients who spend less time on the road are less exposed and therefore pay less for their car insurance.

Prepare for the worst

Consider what could go wrong and impact your business detrimentally. Develop risk management and safety protocols to help limit the impact and make sure you have adequate and appropriate insurance cover in place. Skilled intermediaries can act as real-time risk advisers and advise you on insurance cover options that best suit your needs.

Ensure your cover evolves as the business evolves

At least once a year, on your insurance cover renewal date, you should do a comprehensive review of your cover and assess whether it is still appropriate given the risk landscape and your insurance needs. Your financial adviser is well placed to assist you in this regard.

Also remember to make changes as your risk profile changes during the year, for example as you purchase more assets, or change your business in any way that impacts your risk.

As experts in managing risks, you are welcome to contact De Wet De Villiers Brokers if you have any questions relating to this matter. Simply email us at info@dwdv.insure or call us on 014 592-1077.