The ‘new normal’ we are living in has introduced new risks to the business world, with some risks intensifying to a level that no business owner can afford to ignore. Key risks such as cybercrime and climate disasters are some of the notable ones. We have seen a surge in cybercrime attempts, and the record year-on-year surge in natural disasters such as hurricanes and fires demands attention. This article will focus on risks that pose a direct threat to every organisation. The focus is more on risks that have a direct impact on an organisation’s people, property and equipment, with eventual material downside risk on earnings and profit.
It might seem mundane to talk about risks such as fires and explosions, but just consider the damage caused by the Beirut port explosion – it totalled US$15billion. And that’s excluding the US$1,5 billion in insured losses and the loss in productivity that followed. With fires and explosions being the top cause of losses for business worldwide five years in a row until the end of 2018 and resulting in 9 500 insurance claims totalling over US$15 billion, can any organisation afford not to revisit its insurance cover? When was the last time you did a due diligence on your organisation’s short-term cover?The test should not only be whether you have cover in place, but it should also focus on the scope of the cover. What are the conditions? It pays to have a subject matter expert scrutinise your insurance.
In a world riddled with uncertainty, every organisation needs to review just how comprehensive its insurance is. Just consider the uncertainty that climate change and subsequent natural disasters bring to the insurance world; for instance, in 2020 there was a 40% increase in natural catastrophes totalling US$80 billion in insurance losses. Throw in the impact and uncertainty that Covid-19 brings and uncertainty for many an actuary model skyrockets, needing insurers to review their position. This is why it’s important to stay abreast of the scope, relevance and affordability of your organisation’s cover.
The pandemic brought changes that will stay with us for a long time, if not into perpetuity. Just look at the paradigm shift about how and where we work. Many organisations are embracing the remote working revolution to the benefit of their employees – well, most of them (our hearts go out to the extroverts)! Families are connecting more often, no matter how many time zones the radio waves must cross, and there has been a notable increase in online shopping. And if you think about it, all this technology was available before the pandemic. But it took the pandemic to trigger the use of this technology at mass scale.
And as we continue in the digital era, we can’t ignore some of the bad it brings as well. With the exponential growth of digital adoption come more IT vulnerabilities. At the peak of the first lockdown in April 2020, the FBI reported a 300% increase in incidents. The latest estimate is that cybercrime is now costing the global economy more than US$1 trillion. This is up 50% from 2019 levels. Already high in frequency, ransomware incidents are becoming more damaging, increasingly targeting large companies with sophisticated attacks and hefty extortion demands.
Nedbank Business Banking provides a range of solutions that will enable your organisation to counter the onslaught of cyberattacks. For instance, if you receive a notification from a supplier or client stating that their bank account details have changed, you can verify the new account details before making payment, by using our account verification service. This solution allows you to verify that the bank account belongs to the correct recipient and is valid, thereby reducing fraudulent payments and collections. You can also activate notification services on your Nedbank Business bank accounts to receive instant alerts to changes in your bank account balance and status.
Of all the risks mentioned, not one can be perceived as being more of a threat to any organisation’s most important asset – its people – than Covid-19 and its dangerous and vaccine-resistant mutations. This risk trumped all other risks to take the number one spot for 2021. There are several important questions the management of any organisation should ask. And it starts at the top. For instance: is there a signed agreement in place determining what should happen to the organisation in the event of the death or permanent disability of one of the owners? When was the last time this agreement was reviewed? The relevance of these questions becomes even more prominent when there are sureties or loan accounts in place, or staff who play a key role in the success of the organisation. The questions, of course, need to expand to all the people in the organisation. Do you have a medical aid scheme for your employees, and a solution in place that adequately provides for retirement and for your employees’ families in the event of an employee’s disability or death?
We know that each organisation is unique with its own needs and risks, and we will design a suitable solution for your organisation that takes into account your unique risk appetites. We have access to multiple suppliers nationally, so you can rest assured that you will get the best possible solution for your organisation. Our risk advisors call on clients at their convenience. Not only will you have a dedicated broker, but also a team that is always there to help. Our range of solutions extends beyond commercial insurance; we cater for the business owners’ personal needs, as well as the needs of your employees, through our various distribution channels.
Talk to your business manager or contact us at email@example.com for more information and assistance.