Page 40 - Insurance Times February 2022

pause spending, instead focusing on cash inflow; diminish
working capital; and attempt to improve their financial
structures and funding options.

5. Failure to Innovate/Meet Consumer
needs
The Risk:
Whether using a ride-hailing app or asking a digital assistant
to turn on the lights at home, consumers have quickly
adopted tech-empowered solutions. Innovation, therefore,
is a necessity if businesses are to remain relevant and
competitive.

Considerations:
Data and analytics could improve organizations' 7. Business Interruption
understanding of consumer needs and provide perspective The Risk:
on how to shift their business model to keep up with
Man-made disruptions (such as acts of terrorism, civil unrest
consumers' demands. Innovation found in smaller, or cyber attacks) or natural disasters (such as hurricanes,
incremental changes - such as creating operational earthquakes, wildfires or floods) both disrupt business
efficiencies, finding new ways to serve customers or even operations. Whether the damages are physical in the case
creating new solutions to address more traditional risks - is of natural disasters or nonphysical as in the case of cyber,
equally as important as the headline-making transformative
the financial losses stemming from such interruptions can
technologies.
be significant.
6. Millennials in the firing line Considerations:

The Risk: Leaders need to identify areas of vulnerability from external
Within this challenging economic and political environment, forces that could disrupt operations and extent of potential
the millennial generation is likely to be the hit hard, with a losses, as well as the probability of an occurrence.
prolonged economic downturn affecting earnings at the Organizations should consider proactive steps (including risk
beginning or middle of their career. engineering, risk financing and change management) to
handle business interruption risks.
This generation has already suffered the fallout from the
global financial crisis and austerity. Many have debts from 8. Impact on Contract Compliance
university fees or have been unable to afford independent The Risk:
living. The pandemic and subsequent downturn could further Companies are experiencing an impact on sales, production
exacerbate the intergenerational divide.
and supply chain, among others, as a result of COVID-19-
related issues from business interruptions. These impacts
It is also possible that the frustration of millennials and a have a cascading effect on the ability to meet contractual
distrust of governments could foster social unrest or obligations.
politically motivated violence, leading to possible property
damage or other insurance impacts, the report warns. Considerations:
Companies should consult their legal advisors and review
Considerations: their contracts to determine what, if any, contractual
Government should come up with a sustainable plan which obligations may be impacted and the rights and remedies
should not only help young generation to live their dreams but they have as a result of the delayed performance of
help to nurture the growth of a country. We need to come up contracts.
with affordable solutions for personal protection. If the
insurance industry doesn't help here, it will lose out in the end. Companies should also take (and document) reasonable

40 The Insurance Times, February 2022