Members only
Managing risks and overseeing related activities is a significant undertaking for any business but in the public sector these challenges can be even more demanding.
We're witnessing a decline in budgets and available resource, while internal and external stakeholders are increasingly demanding more evidence of the effective management of an organisation’s known exposures.
It’s common for public sector organisations to experience a reduction in their risk and insurance teams, either due to natural attrition or budgetary constraints. These factors often lead to reorganisation and previously occupied roles can be diluted or amalgamated. At the same time there’s a demand to find savings through effective risk management and through optimisation of the risk transfer process. The notion of reducing investments in risk oversight, while simultaneously achieving lower risk costs is counterintuitive. Unfortunately, this is the reality many organisations nationwide are facing.
The power of networks
The world of risk and insurance is ever evolving, with numerous factors driving the continuous need for updated information. We’re witnessing a new generation of insurance and risk managers within the public sector who use the power of internal and external networks to better articulate capabilities surrounding risk identification and mitigation.
Well-developed networks assist with the provision of timely, accurate and often complex underwriting information. Both internal and external networks can enhance the ability to assess and respond quickly to evolving risks. They can also help address the questions received from insurers when seeking risk transfer via insurance.
Resilient networks facilitate the flow of information, enabling the insurance and risk manager to collate technical data that’s increasingly seen as a necessity by insurance companies. By fostering strong connections with key directorates and by explaining both relevance and impact, it ensures that accurate and technical information is readily available.
Identifying appropriate internal stakeholders is a key component of this process. Vital to any insurance tender or renewal cycle is the previous groundwork and time spent nurturing these internal networks.
There’s a need for strong contacts within all key service areas, particularly among housing, highways, social services and human resources. Fast access to expertise is vital for understanding and articulating an organisation's complex risk mitigation landscape. Providing these stakeholders with relatable context helps build trust and cooperation, clarifying the purpose and impact behind information gathering.
This information, in turn, can affect the availability and cost of insurance programmes. Early and purposeful engagement regarding insurance tender or renewal timelines can help gather accurate and timely information. Insurers are more likely to offer flexibility in accommodating risk, and potentially more favourable terms, where insureds can actively demonstrate a proactive and comprehensive approach to risk management. Leaving information gaps or asking insurers to make assumptions about an organisation's risk exposures or mitigation efforts will not yield the most favourable insurance terms.
The power of networks for an insurance and risk manager lies in their ability to provide access to expertise, real-time information, and collaborative opportunities that improve decision-making, support rapid responses to changing conditions, and enhance the overall resilience of the risk management process.
Another advantage is that a challenging message, supported by external stakeholders with a market-wide perspective, can help prioritise organisational changes and facilitate the adoption of new processes.
Construction, Occupancy, Protection and Exposure (COPE)
An example of this is the recent emphasis by insurers on providing adequate Construction, Occupancy, Protection and Exposure (COPE) information for individual buildings. This is one example of the increasing need for the timely articulation of dynamic risk and exposure information.
Accurate and comprehensive risk information is facilitated by well-established networks, which in this case would be the asset management departments. Proactive management of a property portfolio allows for the creation and maintenance of COPE information over the long term. This is important as it’s not a data requirement that can be fully satisfied within a few weeks or in swift response to an insurer's query.
Market co-operation
ALARM provides a fantastic opportunity to involve a broader network of stakeholders, all of whom are striving for the same goals. This includes suppliers, experts who sponsor the association and peer members. The absence of competition creates a unique situation compared to other sectors, fostering engagement and collaboration among public sector entities who share the same or similar objectives. This environment encourages the open exchange of ideas and best practice approach to risk management.
ALARM has supported risk management practitioners since 1991, providing members with valuable regional and national support to achieve professional excellence through education, training, best practice guidance, and networking opportunities. A great benefit of the public sector community is its natural collaboration, where lessons learned by one are shared with many.
