Country is vulnerable due to “the absence of risk assessment across sectors and organisations” and “diminishing influence on the global stage”
Airmic has responded to a request from the UK’s House of Lords Risk Assessment and Risk Planning Committee to examine the UK’s resilience to extreme risks, particularly natural catastrophe risks.
The response will ensure the voice of the corporate risk management community is heard as part of a national debate about how the UK manages risk.
The upper chamber committee was appointed on 15 October last year, tasked with producing its report by the end of November 2021.
“A central question for this Committee is how to ensure that the UK is as resilient to extreme risks and emergencies as possible,” the governmental body asked in its call for written evidence.
To facilitate a representative submission, Airmic convened a roundtable of its Enterprise Risk Management Special Interest Group. Participants in that discussion and their respective comments remain anonymous, however the sum of their views formed the basis of Airmic’s submission to the committee.
“This enquiry’s scope includes all stakeholders, from government agencies and the public sector to the corporate risk managers, who are managing risk day to day in the UK business community,” says Julia Graham, Airmic’s technical director and deputy CEO.
Airmic’s response addressed eleven of the twelve different questions asked by the call for evidence, ranging from defining extreme risks to suggesting how to improve society’s response.
Answering the question on the extreme risks to which the UK is particularly vulnerable, Airmic addressed eight examples.
- The absence of whole or cross system thinking and risk assessment across sectors and organisations essential for the strategic infrastructure
- Limitations in the use of data and AI to enhance the understanding of supply chains
- The economic dominance and the political centre of power in London makes the UK vulnerable to an extreme event in London
- The electoral process and associated turnover of government create risk to thinking and investing long term
- The extreme effect of the pandemic on the UK will require national funding for many years which will put other potential extreme risks out of vision and place the treatment of these on the risk back burner
- Diminishing influence on the global stage – the lack of direction for financial services and a transfer of authority and capital in the insurance industry away from the UK and London is a tangible example
- On the opportunity or upside, the UK has demonstrated a ‘can do’ culture not bound by general convention or community
- Politics and science could have been more joined up.
Asked what could be learned from corporate risk management processes, Airmic responded:
“Airmic provides a platform for sharing and developing good risk management and resilience thought leadership, practice, learning and development at a UK and Global level. Roads to Ruin, Roads to Resilience and Roads to Revolution are thought leadership reports produced by Airmic which are considered world class.
“Airmic is an active contributor to the International Organization for Standardization (ISO) and the British Standards Institution (BSI). ISO is a worldwide federation of national standards bodies from 140 countries including BSI. Both bodies work in concert to develop standards and guidance including those in the areas of risk, resilience, business continuity, crisis management and security.
“The insurance industry provides insurance and associated services which support resilience at a national and organisation level. Airmic partners with the majority of the world’s leading reinsurers, insurers, brokers, loss adjusters, and associated service providers, to support solutions designed to improve and support resilience, risk management, and risk financing.”