I was reading an article on the globalization of risk just the other day, and it made me realize just how “glamorous” a risk manager is these days. Many new economic challenges are a result of the rise in societal issues around the world, and these instabilities will spill out and influence other risks, such as cyber-attacks motivated by the social unrest. This was highlighted by John Drzik, New York-based president of global risk and specialties at Marsh, earlier this year. With political and social unrest in many countries higher than seen in decades, captive owners need to look at how to be more resilient and mitigate risk where possible within their operations, he said. I couldn’t agree with him more.
Mr. Drzik recommends running scenarios to find changes that could be made to company resiliency plans. Vendors in your supply chain should be diversified, portfolio investments should be examined for risk in particular countries that could be affected by a food or water shortage or social unrest which could cause business disruption damaging a business or investments.
Captive uses are evolving in response to these new risks. This is why, as a captive risk manager, you need to be a little bit James Bond to deal with international threats, a little bit Sherlock Holmes to dig deep through data to provide “elementary” analysis of whether the risk can be something captives can cover, and a little bit Bono because, well everyone should have a little bit of Bono in them!
VCIA will be in the Great White North of Minneapolis tomorrow, November 2nd, for one of our famous Road Shows, so if you are in the hood, drop on by! Thank you all very much, and I look forward to hearing from you!