By Adebisi Ikuomola
In today’s fast-paced world, the complexities of human activity have presented new risk situations everyday which require risk control and remediation measures.
Risk is unavoidable and present in every human situation. It refers to the uncertainty that surrounds future events and outcomes. It is the expression of the likelihood and impact of an event with the potential to influence the achievement of an individual or organisation’s objectives.
Risks are generally divided into pure and speculative risks scenarios.
The outbreak of the Covid-19 pandemic has presented new hazards hitherto unknown to humanity, thus forcibly adjusting our lives schedule to adapt to the new normal.
The health sector presents a robust risk management scenario which requires health care providers to put measures in place for an enhanced safety of patients, visitors and employees, education and awareness, compliance with health regulations.
The outbreak of the Covid-19 pandemic posed new levels of risk globally overwhelming health infrastructures and developing economies were hard to hit. Most advanced countries entered the crisis with interest rates at historical lows and public debts on average higher than they have been over 60 years.
The pandemic posed far-reaching risks to businesses causing supply crisis, travel restrictions, regulatory compliance challenges, credit risks, financial market disruptions, to mention but these few.
At the home front, the Federal Government intervened with various fiscal and monetary policy stimulus to jump-start the economy among which are reduction in interest rates, N50bn credit facility through NISRL Microfinance Bank, N100bn support to the health sector, regulatory forbearance review of 2020 budget, a three-month repayment moratorium on trade money loans, conditional cash transfer for two months to the vulnerable, among others.
The impact on the insurance sector could be felt in the areas of credit risk exposures from businesses facing possible default, less use of face to face marketing channel, pressure on sales from reduced businesses activity and surge in demand for health and business interruption insurances.
Insurance has always existed for the survival of other businesses and to protect the wealth of individuals and the nation. The risks presented by the new normal are multi-faceted. Insurers, therefore, has deployed digitalised and web-based strategies to reach customers, using arrays of new product offerings to create customer experience.
The available insurance product solutions are loss of employment insurance, business interruption cover, health and property insurances.
Sustainability issues such as climate change and environmental degradation used to be the prevalent refrain at most public forum with environmental activists at their best to outwit each other.
Organisations should navigate the risks (and opportunities) associated with the pandemic. It is critical to firstly identify the risks. Albert Einstein once said “learn from yesterday, live for today, hope for tomorrow.”
The building block of any organisation lies in its people, hence think people and also develop a robust business continuity plan. Lastly, your reputation as an individual and organisation at large is key for sustainability.
Navigate this period with flexibility and understanding. Explore insurance solutions as profitable succour when the risks occur.
Adebisi Ikuomola is the Executive Director, Technical at Anchor Insurance Company Limited.