Shifting Dynamics, Unbridled Change: How to Stay Agile in Uncertain Times

ByLinda Regner-Dykeman
discussing business strategies

With a worldwide pandemic, several international conflicts and a sluggish economy starting off the 2020s, it seems nearly impossible for business owners to get ahead.

Over the last year, the Bank of Canada cut rates four times in an effort to lower inflation. Yet Canadians are still pessimistic about the economy, with spending as low as recession spending and the unemployment rate hitting a 7-year high.

With so much at stake, business leaders around the country are asking the same questions: How can we protect our businesses? How can we make the right choice? And how do we stay agile during these uncertain times?

Which Challenges Are Opening Businesses to Greater Risk?

While many challenges can be impactful, the greatest risks come from events that are beyond anyone’s control and those that are too new to be understood properly: catastrophic weather and artificial intelligence.

Catastrophic Weather

The so-called hundred year storm is now happening every second year. In fact, over just two months this past summer, four catastrophic weather events led to more than $7 billion in insured losses.

Preparing for the unexpected can seem impossible, but successful claim management rests on these 3 keys to success:

  • Preparation: The goal is to ensure the organization can survive the event. This means business continuity planning and developing relationships with other businesses that can provide the resources you need in the event of a disaster. Also, be sure to secure appropriate insurance coverage (i.e., water coverage, business interruption) ahead of time.
  • Communication: Include risk managers and other stakeholders in the planning conversations. Be sure they understand the organization’s risk appetite and are aware of the risk mitigation procedures.
  • Mitigation: Once an event hits, business leaders will need to be able to execute on the plans. They should assign vendors quickly, manage any extra expenses and take steps to prepare for the business interruption claim as soon as possible.

Each of these components is critically important to surviving the disaster, but the backbone of the whole operation is in the relationships: between the business and any supporting vendors, or between the business leaders and the employees. Focusing on these relationships can help ensure that those impacted by the weather event will come out on top.

Artificial Intelligence (AI)

While AI offers exciting opportunities for a wide variety of organizations, it also opens those organizations to immense risk.

Unfortunately, many organizations today are adopting AI solutions without fully understanding the risks. The 4 key areas where AI is creating value – and adding corresponding risk – include:

  • Concision: Otherwise known as efficiency, this area encourages businesses to reduce workload and increase productivity in the workplace. However, this can increase risk by oversimplifying an issue and leaving gaps.
  • Customer Engagement: Whether it’s chatbots or virtual agents that streamline services, this is one of the best known forms of AI. However, risk increases when the bot doesn’t work well and negatively impacts an organization’s reputation.
  • Creation: AI tools can quickly generate new content of all kinds. However, the human touch is still needed to mitigate risk, as a lack of in-house expertise can increase risk in professional liability.
  • Coding: Possibly the best understood issue with AI, coding refers to interpreting, translating and generating code – all of which lead to an increased cyber security risk, as well as technology-related errors and omissions.

Best practices for this new and emerging technology are not fully understood, leaving organizations open to risks they can’t adequately prepare for.

A New Risk Management Approach

With major risks like these, business leaders must make changes to their mitigation strategy. Just as new drivers are taught to be aware of everyone around them, business leaders must take all potential factors into account. Whether it’s geopolitical unrest, changing regulations, new technology or even supply chain issues, leaders today need a new approach to risk management.

Those who adopt an orientation toward future thinking will find the greatest success. Future thinking practitioners have the flexibility, creativity and complex problem-solving capabilities to be ready for anything. They take in new information all the time, constantly developing and fine-tuning their responses. They can identify a challenge when it pops up, and they have the experience and the information to prepare them to meet the challenge. They are also open to alternative risk solutions, including parametric coverage and even captives.

In the end, organizations need a proactive framework around frequency, severity and impact of risks. There can be hidden opportunities around uncertainty, but those that prize ongoing development and are constantly learning from everyone around them will come out on top.

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Linda Regner-Dykeman

Linda Regner Dykeman, BA (Hons), FCIP, CRM is the National Chief Marketing Officer for global insurance brokerage Hub International in Canada. She has national responsibility for overseeing market relationships, developing national placement strategies and creating product strategies for target segments, programs and clients. Linda is a member of the North American Executive Leadership Group.

Prior to joining Hub, Linda was the Chief Agent for Allianz in Canada, and a member of the North American Executive Management Team, where she drove success with her highly engaged team by cultivating strong relationships with key and major clients and key broker partners. Linda also held senior roles at Travelers, leading Business Insurance and Aviva, leading Commercial Lines, Specialty Lines and National Business Development, all in Canada.

Linda is a University of Toronto graduate, Bachelor of Arts, Honours, who also holds the FCIP (Fellow Chartered Insurance Professional) and CRM (Certified Risk Management) designations.