As a crisis communicator, my job is to mitigate reputational damage to organizations from actions both in and beyond their control. However, like insurance, it is hard to convince clients to invest in planning for scenarios that only could have a serious and material business impact. Wishful thinking and inertia are a dangerous combination.
To anticipate future work (and help light a fire under current clients), I reached out to Stephen Mallory, President and CEO of Directors Global, one of Canada's top consulting practices dedicated to risk management.
Directors Global has an annual list of top concerns for Canadian organizations that includes the following for 2022:
Cyber-attacks:
Fear of ransomware, cyber breaches and other disruptive cyber-attacks continues to be high for businesses. Other concerns include risks from the shift to digitalization and remote working. As evidence of this concern, Directors Global points to Allianz Global Assistance's increase in 500 cyber claims in 2018 to over 1,100 claims in 2020, along with double the reports of extortion demands. As a result, in addition to increasing prices for cyber insurance, insurance companies now look for evidence of controls on technology, backups, patching, training, and business continuity arrangements.
Business Interruption:
Cyber security, natural catastrophes and the health pandemic have increased concerns of supply chain disruptions. In addition, a growing reliance on technology and digitalization also threaten business continuity. The Business Continuity Tool Kit available at Benson Kearley is an example of new innovative guides for companies looking at proactive risk management using internal resources.
Natural Catastrophes:
Climate change is increasing business concern about overexposure to the effects of floods, thunderstorms, tornadoes, and winter freezes. Look no further than British Columbia's double hit from devastating wildfires in the summer that destroyed the town of Lytton B.C., and record flooding at the end of 2021. Directors Global explains the financial risks are becoming increasingly difficult for insurers to quantify and actuarially price; hence, like with cyber, insurers are leaving this space or radically re-pricing their offerings. For some businesses, self-insurance is the only option, especially for companies in jurisdictions with a history of exposure to these conditions.
Pandemic:
Business concerns around COVID-19 remain because of unpredictable threats of unknown consequences, new strains, and mutations of the virus. Despite government intervention, many businesses have not survived this pandemic or have been so damaged that they are unlikely to survive a significant new wave. Directors Global adds another critical concern from the pandemic: the shortage of skilled workers, one of the drivers behind the current 'great resignation'.
After speaking to Stephen Mallory, I had one question: Are threats of cyber-attacks, business interruptions, natural disasters, and a pandemic enough to motivate more businesses (of all sizes!) to start crisis communications planning?
In 2019, 95 per cent of PWC's Global Crisis Survey respondents said they expected a crisis to hit within the next two years, but only 30 per cent of respondents to the 2021 survey said they had a crisis management team in place when the COVID-19 pandemic hit.
If the best predictor of future behaviour is past behaviour, then, sadly, the answer to this last question is – no, not yet.
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