The global COVID-19 pandemic has taught risk managers to be prepared for any threats, no matter how unlikely or far-fetched they may seem, industry experts said at a RIMS conference webinar panel.
The risk of a pandemic has been on the World Economic Forum’s radar since 2006, so no risk manager can say they were surprised that COVID-19 happened, Colleen Zitt, chief risk officer at Zurich North America, said during RIMS Live 2021, a global virtual conference for the risk profession.
And yet, “did we really envision that we would experience what we experienced over this past year?” she asked during the session Global Risks 2021: A Vision for the Future.
Jeffrey Bray, head of global risk management at Prologis, a real estate investment trust, emphasized the importance of being ready for anything. “What’s really amazing is, [the possibility of a pandemic] was hitting the global risk report in 2006, but did anyone feel like they came into this pandemic completely prepared? Probably not,” he said. “I think it’s a good reminder that we often underestimate what we think either has a low likelihood or ‘it just won’t happen to us.’ That’s my first takeaway and all this.”
A second takeaway for Bray is the broad range of responses to the pandemic throughout the world. North American and European risk managers could probably take a few notes on how their Asian peers responded, he said.
“Asia, I think, gets better marks than maybe the U.S. and Europe,” Bray said. “It’s because they had had more recent events. It was more relevant to them and I think their mindset was there. I think the U.S. and Europe [suffered from]: 1) unpreparedness; 2) just probably their populations grasping those risks; and then, 3) the ability to collaborate as a group.”
Misinformation also played a part in making things difficult for risk managers, he added.
“Something that really resonates with me is [the] curveball that misinformation can sometimes provide,” Bray said. “The culmination of maybe lack of government coordination, maybe getting caught off guard on preparedness, and then misinformation — all [of these things] really complicate how risk managers should be thinking about how they might respond to risk going forward.”
Looking forward, the pandemic and its ripple effects are likely going to affect every aspect of risk management for the next 10 years to come, if not more, Zitt said.
That may be bad news when you consider the job losses, closed businesses, and deaths that have happened and that will continue to happen because of the pandemic. But there is a flip side to all of this, Zitt observed.
“COVID also fueled some real opportunities,” she said, alluding to the rise of digital operations during the pandemic. “Many of us had to turn our businesses into an overnight connection point for our customers that could no longer be face-to-face. So, what’s really happened as well is the fueling of technology and digital portals and connections that ultimately don’t require face-to-face.”