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Virtually every aspect of the COVID-19 emergency has an element of uncertainty. In a recent virtual Dynamic Huddle sponsored by the Pan-Asia Risk and Insurance Management Association (PARIMA) and AXA XL, three industry leaders shared their views on some of the ways individuals and organizations can navigate through these supremely uncertain times.

Virtually every aspect of the COVID-19 emergency has an element of uncertainty. Every day, we learn more about the virus and its pathologies; yet, much remains unknown. Likewise, we can observe how the pandemic is disrupting businesses and economies—and tragically ending lives—in all parts of the world. Still, we currently have only a vague sense as to how the situation will evolve in different countries and regions in the coming weeks, months and years.

This theme—how to navigate in an environment fraught with uncertainty—was the topic of a recent virtual Dynamic Huddle hosted by the Pan-Asia Risk and Insurance Management Association (PARIMA) and AXA XL. Participating in the panel were Gordon Watson, CEO, AXA Asia; Nor Adila Ismail, Chief Risk Officer, PETRONAS; and Franck Baron, Group Deputy Director Risk Management & Insurance, International SOS, and PARIMA Chairman. The session was moderated by Stacey Huang, PARIMA’s Executive Director. The attendees included insurance and risk management professionals from Australia, China, Hong Kong, India, Indonesia, Japan, Malaysia, New Zealand, Philippines, Singapore and Thailand.

Following is a summary of the session’s main topics and themes. A video link to the full session can be found at the end of this summary.

Clarity, courage and humanity
The panellists started by highlighting how the COVID-19 emergency is forcing continuing readjustments in their priorities as they juggle competing challenges involving family and friends, co-workers and their individual corporate responsibilities. In this context, Gordon noted how leadership rooted in the “Zen principles of clarity, courage and humanity” is more important than ever, although he also acknowledged that “it is not always easy to do in this situation amid such uncertainty”.

Each also highlighted the human factor of this event; how the pandemic is changing the way we work and the emotional toll that can bring.

“Before you can think about anything else, you need to make sure your people are safe. For us, that’s paramount. You take care of your people and then they feel able to take care of your customers”. (Gordon Watson)

“It’s also about the mental health and people being able to cope with it. When you’re in crisis mode, people can cope with it for days, a few weeks, but what is going to happen if this is going to last six, eight, twelve months? How are we going to cope with all that? So, providing emotional support to people around the world (is essential). If someone has personal issues and needs to talk with somebody else, (International SOS) has a special facility for that”. (Franck Baron)

Agility
Given the rapid trajectory of the pandemic and its impacts, as well as uncertainties about its trajectory and impacts, the panellists stressed that decision-makers needs to be agile and swift and accept that some decisions will be based on less-than-perfect information.

“Even if we have to make a decision and maybe we have only 60-70 percent of the information, we still need to make the call now. And that’s happening every day”. (Franck Baron)

“You need to use speed over precision, the 80/20 rule, because you can’t get all of the details of everything to make a perfect decision”. (Gordon Watson)

Pandemic response
Each of the panellists indicated that their organization’s pandemic response efforts encompass elements of employee support and operational readiness, along with tactical moves to promote resilience and/or respond to urgent threats.

“Petronas’ response has three main components. First, we have a pandemic response team that tracks affected employees and does contract tracing. Second, there is a group looking at cross-business impacts. They’re meeting with regulators, getting approvals, and doing what we need to do to keep the business moving.

“For us, we have to deal not only with the effects of COVID-19 but also the steep drop in oil prices. We are facing disruptions from the demand side as well. So, liquidity and our cash flow position across the group are necessarily priorities. For this, I can’t emphasize enough the value of having aggregated information, so we can understand the total impact to the group.

“The third group calls itself “Fast Forward”. It focuses on what we can expect and need to prepare for post COVID-19”. (Adila Ismail)

Risk management implications
Franck, Adila and Gordon all noted the numerous challenges corporate risk managers face in responding to the varied threats, while also emphasizing how the COVID-19 emergency is prompting new conversations within their organizations around risk management and mitigation.

“Thanks to COVID-19, I think we will need to be less compliance driven when we report risks to the top management. Instead, we need to be even more risk agile”. (Franck Baron)

“I think there is a new norm with COVID-19. Because we will get another COVID-19 later on. And maybe it is not going to be a pandemic but something else. I think now there is an understanding in an organization that things can change quickly and completely disrupt your business, your reputation …. We have so many businesses around the world where their survival is at stake right now”. (Franck Baron)

“(Previously), we would go to our Board on a proposal-by-proposal basis. Now the Board is asking, can we have more strategy discussions, more portfolio kinds of discussions? How good is the current portfolio, how resilient is it? What is happening with our current cash flow generators, the areas where we are trying to grow, and where the future cash flow generators are going to be? That kind of conversation needs to happen more with the Board. That was a specific ask”. (Adila Ismail)

Risk implications
When asked how the risk landscape is changing as a result of COVID-19, all cited cyber. Two mentioned, for instance, that their employees are not allowed to access certain video conferencing platforms from their work computers because of security concerns. Along with that specific issue, the panellists acknowledged that working from home as well as the rush among all types of organizations – retailers, restaurants, art museums and galleries, government agencies, and on and on – to provide goods and services online will only exacerbate an already difficult situation.

“I think cyber risk is going to be one of the major themes, because everyone is now having to do everything digitally. There’s a need to understand cyber risk, cyber insurance, and what that means, because it is a very deep and complex topic. Everyone knew it was important, but that’s become amplified”. (Gordon Watson)

Petronas was the only industrial company represented on the panel, but as its Chief Risk Officer noted, COVID-19 is prompting a reassessment of its risk mitigation strategies.

“Our current cash-flow challenges are forcing us to look at our total cost of risk in a new way. Because we have traditionally not taken certain insurance programs. And that’s causing us to reassess if we need business interruption. That’s doesn’t necessarily mean we will do more risk transfer, but we will be looking at different risk profiles, and whether we are adequately covered on all fronts. The one that is very clear to us particularly is business interruption”. (Adila Ismail)

Final thoughts
“The most Googled phrase at the moment is ‘How can I help’? So, COVID-19 is really uniting the world, bringing the world together”. (Gordon Watson)

“I don’t think BAU—business as usual—will really happen. Instead, BAU will stand for business as unexpected. Let’s not brace for impact but let’s brace for very turbulent times moving forward”. (Franck Baron)

“I feel that many of our traditionally accepted risk management practices have probably come to their natural limit. And where it is adding further value in a world that has become more complex, dynamic, unpredictable than any other era before. We’ve gone through many cycles before. The traditional methods must be replaced by new risk solutions if we are to survive in a world that is more informed, agile and disruptive than at any other time in human history”. (Adila Ismail)

Click here to watch the full session.

About PARIMA
PARIMA is the Pan-Asia Risk and Insurance Management Association. It is a not-for-profit professional association dedicated to developing risk management as a profession and providing a platform for risk & insurance managers to connect. We aim to strengthen and enhance the culture of risk management by creating opportunities for education and dialogue within the community. It currently has more than 2,200 members representing more than 1,130 companies across the Asia-Pacific region. For more information on PARIMA and its activities, please visit http://parima.org/ or contact info@parima.org.

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