The (re)insurance industry is at the forefront of conversations to create a forward-looking solution for pandemic risk in conjunction with policyholders, insurance markets and key policymakers.
The COVID-19 crisis has exceeded resiliency mechanisms the world over, while it also shifted thinking, as seen in the widespread recognition that it caught everyone unprepared. Although some companies had “pandemic” on their risk register, they never really thought about it, defined it or exercised it in drills or war games, according to Allison Pan, Senior Vice President at Guy Carpenter-affiliate Marsh Risk Consulting.
Senior leaders now have a heightened understanding of pandemic risk. However, the problems it has wrought are overwhelming. Businesses are caught up in recovery, return to market and balance sheet protection — in other words, survival. Most are not preparing for a second wave or the next pandemic. Companies need to be agile, but agility is not easily achieved, especially in organizations that have not examined why they were caught unawares or prepared for the next catastrophic risk.
People have learned and overcome so much during the collective response to COVID-19 that there is now a sense of comfort as the “recovery” begins. But that comfort stems from an illusion of control. As business leaders rush to reopen, or states lift restrictions despite rising case counts, it is important to understand all the potential pitfalls of recovery.