The pandemic has turned traditional risk management approaches upside down. Businesses who felt confident with how they handled the day to day risks of their companies, now find themselves vulnerable. COVID -19 has completely changed their business and their ability to create earnings. Dynamic risk management is now, more than ever, a required practice for business owners.
What is Dynamic Risk Management? It is a practice where you take incongruent data elements and try to predict the future of risk to your business. This is followed by a decision to deal with this unpredictable risk when it occurs, based on you risk appetite.
Here are some examples of questions to ask yourself that can get you in the dynamic risk mindset:
1) How will risks in our business evolve over time? What is changing now around us that can affect us later?
2) Will they become systemic to our organization? Could they prevent growth, or put us out of business?
3) Is our risk appetite high or low ? Shall we decide to deal with these risks or not?
4) Do we have the right approach to survive and thrive if we take on these risk when they come knocking at our door?
In todays business climate new and emerging risks have to be predicted, and strategies formulated to deal with them, "just in case". Is it impossible ? Some say it is. All business owners should look at their organizations and the world in which they operate and begin to think about possible risks and how current ones can evolve. They also have to ask themselves what that could mean to their business. The challenge is to do this and not lose your entrepreneurial spirit or become a worry wart (not an easy task).
We will go into more aspects of Dynamic risk management in future posts. Until next time be careful out there and know you risks.
Posted By: G. Kevin Nemith - President and Agency Leader of CNC Insurance and Pfister Insurance
knemith@hilbgroup.com Send me your comments! or Click "Subscribe" at the top of the page
Hilb Mid-Atlantic Group
"top 20 Insurance Brokers and Risk Managers in the USA"
Thank you Alex for reading and your comment. Let me know if you have any questions on my post. Take care!
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