Managing complex organizational risks

The 2020’s are proving dynamic and challenging for boards and corporate risk managers who are faced with a diverse range of complex and often interconnected risks.

The physical and transition risks associated with climate change present a generational challenge to us all. This includes organizations of all types, both from the point of view of protecting critical infrastructure from extreme weather-related events and ensuring business models are compatible with transitional changes in the global economy linked to future greenhouse gas emission targets.

Extending from those risks are the broader commercial implications and risks of the growing scrutiny of organizations’ ESG (environmental, social and governance) strategies and policies that, by their very nature, reach into just about every part of an organization.

Trends that have been accelerated by the COVID-19 pandemic, in particular the rise in home and hybrid working, have brought new technology challenges and, with them, a need for more urgent and robust responses to potential cyber risks. In addition, employee experience, retention and wellbeing are all commanding fresh approaches.

Meanwhile, the hangover from the pandemic, exacerbated in some regions and industries by geopolitical and economic instability, may be affecting costs, supply chains, distribution and, in some cases, decisions about longer-term facility and manufacturing locations.

Put together, the complexity of many of these risks means that traditional ways of transferring risk through insurance markets alone may not meet your needs. Other risk mitigation and financing options, such as risk portfolio optimization (what risks to keep, mitigate or pass on) and alternative risk transfer methods, such as insurance-linked securities, captives and parametrics may be valuable additions to an organization’s risk management toolkit.

What sets apart the WTW approach to complex organizational risks?

Today’s challenges require not only working hard, but also working smart to decide between or combine risk acceptance, avoidance, mitigation and transfer strategies that work for your particular organization and its goals.

Our support for you in reaching those decisions is underpinned by our industry specialists’ knowledge and experience and by data and analytics tools that help provide the clearest possible understanding of the likelihood of you being affected by certain risks, and their potential reach, correlations and scale.