Surveys suggest that less than 25% of small business has any form of risk management plan beyond the purchase of insurance.
A considerable percentage of business risks aren’t insured, and, even for those that are, lack of appropriate cover and underinsurance remain a perennial issue. Most small businesses have shallow pockets, meaning the cost of a loss can often be business-ending, especially where there isn't enough insurance or risk contingency planning in place.
Cost and complexity are cited as primary reasons for businesses not developing a risk management plan. This is hardly surprising given the range of risks an average business can be exposed to, not to mention the myriad of other operational activities necessary to run a successful business. The problem for businesses is made even more complex as some risk areas, particularly emerging risks such as cyber, may or may not be covered by a variety of different insurance policies.
See also: Risk Management, in Plain English
Insurance carriers have vast amounts of business risk management expertise, but typically this is targeted at the larger or more complex risks that an insurer covers.
But this risk management expertise can be mobilized to customers in a cost-effective and efficient way through digital risk profiling, enhancing both the ability of a business to manage risk and of insurers to recognize active risk management in their pricing.
Until now, most of the technology supporting risk has been designed, and priced, to only appeal to larger organisations. RiskAdvisor has built a platform to enable insurers to cost-effectively mobilize their risk expertise to both enhance business best practice and form deeper relationships between a business, its intermediary and its insurer to reduce the cost of risk and boost the resilience of organizations.
Specific benefits to insurers include:
- Risk assessment – ability to analyze business- and industry-specific risks, producing a risk profile to support better decision making.
- Optimal insurance coverage – enabling the more intelligent matching of risk and insurance to reduce the risk of being underinsured.
- Much greater resilience for insureds to recover from loss events.
- Improved governance and compliance outcomes.
- Confidence to key stakeholders such as financiers and equity providers.
- Collaboration with intermediaries to help them become trusted risk advisers, building strong relationships with their customers and providing value-added services.
- Ability for business partners to enrich partnerships with key stakeholders such as customers, suppliers and financial institutions.
