IGA News

Rising risks during recessionary periods

Rising risks during recessionary periods

29 January 2021

The UK (and wider world) is currently facing times of enormous uncertainty and instability due to a number of socio-economic factors.

At the time of writing, Covid-19 (Coronavirus) continues to cause anxiety and disruption. Many companies have been hit hard as a result of the pandemic and consequently are struggling to open for business or even remain solvent. The situation is further compounded by the ongoing complexity surrounding Brexit and the potential for negative interest rates.

During such challenging times, certain recessionary trends are observable. These present increased threats to businesses and have an impact on the traditional insurable perils that organisations and individuals face. Insurers recognise that such conditions inevitably result in a higher frequency and cost of claims, and may result in claims inflation across all lines of business.

Potential Risks

Incidence of theft tends to increase, including physical items (cash, cars, tools) and online identity theft and fraud. Both Garages and homes are being targeted, with vehicles and machinery acting as a lucrative lure for criminals.

The need for risk management

Paradoxically, at a time when risk management is most needed, some organisations de-prioritise it due to financial pressures. Businesses might look to save costs by removing those roles perceived as ‘non-profit’, such as risk/ health and safety managers, or making cuts to training programmes. This can prove a false economy and lead to greater damage and business disruption further down the line. Fairly simple security measures can help reduce the risk of break-ins and theft, such as CCTV, intruder alarms and the use of locks (including padlocks) to gates, shutters and external doors.

Summary

During challenging times, organisations may face increasing risks combined with the pressure to make short-term savings; however reducing risk management can prove costly and disruptive. Visit Allianz Risk Management for the latest guidance on a variety of risk topics.

Author: Stuart Daws, Head Of Loss Control Engineering, Allianz

Allianz Insurance has been the RMI’s exclusive insurance partner for over 25 years, and has designed the Motor Trade RMI product exclusively for members. Click here to find out more.