Operational readiness emerges as top priority for all businesses

In the wake of the COVID-19 outbreak, operational readiness has emerged as the immediate priority for all businesses, whether small, medium or large, according to a new study by insurance broker and risk adviser Marsh.

Speaking about the impact of COVID-19 and managing its business impact, Marsh Middle East and Africa CEO Christos Adamantiadis said the current events have highlighted that, as the world becomes more inter-connected, the risk of disease outbreaks may increase, and preparation for a pandemic will become a mainstay of business continuity plans in future.

To respond effectively to these threats, businesses are increasingly taking a two-pronged approach, starting with establishing preparedness strategies that cover emergency response, business continuity, crisis management and crisis communications. At the same time, businesses will review how existing insurance coverages may respond to an outbreak, and make any necessary changes to policies.

To date, standard corporate business continuity plans have accounted for a range of external and internal scenarios such as political instability, natural disasters, economic recession, theft or fraud – but most did not account for an event such as the current pandemic. Businesses now find themselves in the position of planning for a unique set of emergency scenarios that could impact their operations, as well as COVID-19’s prolonged effects on staff welfare, operations, supply chains and the broader economy.

Mr Adamantiadis said, “COVID-19 has impacted all areas of society and it is vital for companies to have a continuity plan in place - as maintaining a reactive approach can potentially delay recovery efforts, increase costs, and place a significant strain on day-to-day management, which will further compound the challenges faced in this environment. However, it goes without saying that managing operational risks has to be well balanced with safeguarding the well-being of employees.

“All organisations can look to mitigate the economic and other effects of pandemics through comprehensive risk management. Plans should include business continuity and contingency planning as well as modelling and analysis of pandemic risks. These will support the pricing and placement of pandemic-specific insurance coverages that will help reduce risk. Taken together, these important tools will assist in ensuring you are prepared for the inevitable reality of a pandemic outbreak.”

Source: Asia Insurance Review