We have identified seven preconditions essential in the movement towards resiliency and de-risking public sector exposure.
1. Leadership with a clear mandate to act. This requires that risk management efforts and administration must be appropriately funded, staffed and/or supported by organizations that bring the requisite expertise required to achieve the objectives that have been established.
2. Accountability supported by adequate resource allocation that is structured in a manner to cut through government bureaucracy and the overlapping centers of responsibility that typically exist across governmental agencies.
3. Transition from an overreliance on post-event financing to proactive community resiliency efforts, which encompass “build back better” concepts that are supported by appropriate pre-event risk financing programs.
4. Addressing realities of human nature through education, risk awareness and incentives for insurance and risk mitigation.
5. Unlocking the wealth of information in publically held data sources for the greater good.
6. Product creativity and continuity from the private sector.
7. Collaboration and a holistic approach through public-private partnership models that provide clear identifiable benefits to all stakeholders.
Two of the most important enablers in transferring risk to the private sector and de-risking public sector balance sheets are the emergence of robust risk analytics and the growth and abundance of risk capital. These trends will support broader product offerings and greater market stability around which the private sector can close the protection gap.