Good morning and welcome to our Horizon Scanning newsletter.
The last month has seen us visit multiple events and deliver various services for our clients across many sectors. We have worked in Communications, Manufacturing, Food, FinTech, Higher Education and Insurance industries.
So that we can keep up with current risks and discussions this month, we have attended the DRI International (Disaster Recovery Institute) x UCL Institute for Risk and Disaster Reduction (IRDR) Colegent conference in London, Attended both the Chemical Industries Association Industry, CIRMagazine Business Continuity awards and the Airmic (Association for Insurance & Risk) conference 2023.
June also saw us celebrate the Employee Ownership Association Employee Ownership Day on the 23rd of June, 2023, the 11th annual EO Day!
Each EO Day, thousands of employee owners, EO businesses and supporters of employee ownership from across the UK come together to raise awareness of the benefits and impact of employee ownership.
Prizes, if you can guess, what made us laugh!
Our In The News section has more insights and valuable free tools to help support your business.
Thanks for reading, and stay safe.
Airmic Conference 2023 – Highlights and Key Insights
The 60th Airmic Conference 2023 brought together risk and insurance professionals to explore the industry’s future.
Artificial intelligence (AI) emerged as a critical theme, drawing attention from optimistic and pessimistic perspectives. Optimists have described AI as a way to encourage sustainability and innovation. But sceptics have raised concerns about its potential negative impact on jobs and inequality, distracting attention from the industry’s pressing needs.
Sustainability reigned supreme by emphasising the interconnectedness of risks on the front lines of climate change. Insurers, traders and consumers were urged to adopt sustainable practices and consider the broader environment in assessing and mitigating risks.
The need for better data was widely acknowledged, and discussions emphasised the value of more data for risk assessment. However, the industry faces challenges due to fragmented and dispersed data sources. Collaboration among stakeholders is needed to address these challenges and establish standardised data sources.
Collaboration emerged as an essential theme throughout the session. Industry stakeholders were encouraged to combine their skills, resources and insights to meet the complex challenges of a developing landscape, technological change and climate change. The collaboration was seen as crucial to driving innovation forward, increasing performance and enhancing resilience.
In the seminars, two areas covered regularly were the importance of scenario testing and the importance of Contingent Business interruption Insurance and where the risk industry may be heading when assessing these matters. This will be the focus of our newsletter this month.
In today’s issue, we will explore the topic of Contingent Business Interruption (CBI) insurance and shed light on the significance of scenario testing in relation to risk management.
Contingent Business Interruption Insurance: Protecting Your Business
Businesses face numerous risks, including natural disasters, supply chain disruptions, or other unforeseen events that can severely impact operations. Contingent Business Interruption (CBI) insurance is designed to address the financial losses a business may experience due to interruptions in its supply chain or the operations of key customers.
CBI insurance typically covers losses arising from damage to a supplier’s or customer’s property, preventing them from fulfilling their obligations to your organisation. It can help mitigate financial losses resulting from supply chain disruptions, such as fires, floods, earthquakes, or even political instability that affects the smooth functioning of your business.
Scenario Testing: Unveiling Vulnerabilities and Enhancing Preparedness
To effectively manage risks associated with contingent business interruption, scenario testing plays a pivotal role. Scenario testing involves simulating potential disruptions and evaluating their impact on your business. Creating various hypothetical scenarios allows you to identify vulnerabilities, assess potential losses, and develop appropriate risk mitigation strategies.
Here’s why scenario testing is crucial for effective risk management:
Contingent Business Interruption Insurance: A Closer Look
Contingent Business Interruption (CBI) insurance protects businesses from financial losses resulting from disruptions in their supply chain or the operations of key customers. While traditional Business Interruption (BI) insurance covers losses caused by damage to the insured’s property, CBI insurance extends that coverage to include losses stemming from damage to the property of suppliers or customers.
Here are some key points to understand about CBI insurance:
The Importance of CBI Insurance
Contingent Business Interruption insurance is vital in risk management for businesses with complex supply chains. Here are a few reasons why CBI insurance is essential:
Scenario Testing Best Practices
To make the most of scenario testing, consider the following best practices:
Businesses must assess their specific risk exposures and consider whether CBI insurance is appropriate for their operations. Consulting with insurance professionals and conducting thorough risk assessments can help determine the right level of coverage needed to protect against contingent business interruption risks.
Remember, an effective risk management strategy encompasses a combination of insurance coverage, proactive planning, and ongoing evaluation of supply chain vulnerabilities to ensure the resilience and continuity of your business.
Thought for the week:
“Risk management is not merely about anticipating challenges but embracing proactive measures to protect your business. As you navigate the intricate web of supply chains, remember the power of Contingent Business Interruption insurance and scenario testing. By fortifying your resilience and preparing for potential disruptions, you pave the way for a future where your business survives and thrives in the face of uncertainty.John Benfield