Two thirds of respondents said insurance had not fulfilled corporate needs during the pandemic
European Risk managers have helped maintain the continuity of their organisations during the pandemic crisis. They have participated in task forces and crisis units, promoted communication, supported new working practices, pursued insurance recoveries where possible and begun work on recovery, according to a survey published by FERMA.
Key findings include:
- More than 30% of respondents were involved in creating and implementing their organisation’s COVID-19 crisis management; 17% led the process. More than 20% have been involved in their organisation’s pandemic communications response. 23% are playing a significant role in setting up and/or rolling out the recovery plan.
- The vast majority of respondents (90%) felt their organisations were either well or somewhat prepared to deal with the pandemic. Principle risk management tools were business continuity plans (74%) and unspecified preventive measures (59%).
- For 31% of respondents, a pandemic was part of their organisation’s risk register in September of 2019.
- 67% said insurance, especially for non-damage business interruption (NDBI), had not fulfilled corporate needs. Approximately 60% would be interested in an NDBI insurance product for pandemic or other catastrophic events.
- The demand for risk management will grow as a result of the pandemic (75%).
FERMA President Dirk Wegener said: “Most respondents felt their organisations were largely or fairly well prepared to manage the pandemic, although at that stage, a majority said their organisations had suffered negative operational and financial impacts from the pandemic. We could not anticipate the full impact of government lockdowns and other control measures. When we have a longer perspective, we believe that we will see the value of flexible risk management tools, such as business continuity plans, in business resilience and recovery.”
Wegener added: “Insurance, unfortunately, has not provided the support organisations need for their business interruption. There is a strong appetite for a future financial solution. We have a long relationship with the insurance industry. We want it to be part of a solution by contributing not just risk transfer but also risk expertise to a combined public-private initiative.”
He concluded: “While this survey is not - nor could it be - exhaustive in terms of content, it provides an important insight into the role of risk managers during the pandemic and lessons that will be incorporated into enterprise risk management for the future.”
FERMA’s COVID-19 survey, Risk management, recovery and resilience, is the first Europe-wide look at risk and insurance management during COVID-19. The survey was carried out among FERMA’s 22 member associations between 28 September and 21 October 2020. Replies were received from 314 respondents in 21 countries.
The responses are a snapshot of risks managers’ perspectives in the middle of the pandemic crisis. They also provide a quantitative contribution to the policy discussion taking place at EU and national levels on resilience to pandemic and other large catastrophe events.