The human costs associated with COVID-19 are prominent in our thoughts, discussions and efforts at Guy Carpenter. While COVID-19 has placed a tremendous burden on businesses, the reinsurance industry is closely monitoring the direct and indirect financial impacts of the virus, and advising board members and executive committees on how companies can effectively mitigate the impacts of the pandemic.
Obligations for non-executive directors (NEDs) are easily stated but executed with difficulty. Arguably the most challenging responsibility under stress is protecting long-term shareholder value. While this necessitates a focus on survival in the short term, it means boards must divert sufficient attention to what comes next: recovery.
Moving Out Of The Survival Phase
The survival phase of the COVID-19 crisis, in which organizations grapple with the challenges of lockdown and its near-term implications, is well underway. These are the tactical and operational matters of keeping the business alive and defending its financial position, according to James Gordon, Principal, Digital, David Howard-Jones, Partner, Finance & Risk, and Rutger von Post, Partner, Organizational Effectiveness, all of Guy-Carpenter affiliate Oliver Wyman. Charles Macek, Senior Advisor to Marsh & McLennan in Australia also contributed to the report.
The challenges and threats are myriad: operations are stressed by process changes and staff shortages, employee and customer behavior is altered and supply chains are disrupted by demand fluctuations and government interventions aimed at ”flattening the curve”. But, navigating these challenges is the domain of executive management.
Stakeholders within the world of reinsurance, whether they are insurers, reinsurers or other professional capital providers and risk takers, have broadly transitioned to remote working without major delays. Business continues to be conducted effectively. But the grave situation globally inevitably means our clients may be dealing with greater disruptions in their primary business. Guy Carpenter is focused on working with each company individually to address its needs in these unprecedented times.