As we emerge from the first phase of the pandemic, an expected saw-shaped economic recovery will create ongoing uncertainty and the need to adapt fast to changing conditions. Companies and their insurers will be challenged to strengthen resilience while reframing their organizations to be fit for purpose.
One challenge of the recovery phase will be balancing the need to resolve business critical disputes in a way that maximizes financial recovery or minimizes financial exposure – depending on the perspective – while preserving the enterprise’s reputation and safeguarding long-term commercial relationships.
With the impact of this pandemic unprecedented in the modern era of business, few, if any, organizations will have the inhouse experience and capabilities needed to navigate their complexities. Many companies will have to assemble specialist teams to access the necessary expertise. There is also huge complexity given the diverse range of impacts of COVID-19, which means the sheer volume of data and information to be considered may overwhelm some companies. Technology can help here, but only if deployed by skilled talent.
Three action points can help organizations build resilience:
- Develop a well-documented model of potential outcomes and responses, drawing on the expertise across a range of disciplines.
- Identify and prioritize what key future commercial relationships will look like. Supply chains will change, and how aggressively companies pursue legal claims may depend on whether commercial relationships are likely to continue.
- Use insights and learnings to redesign processes and governance on commercial risks. This will be particularly important as governments and regulators will want to know how business models have been strengthened.
Businesses can take steps to mitigate the impact of claims created by the disruption of COVID-19. Embracing data and technologies to model outcomes, drawing upon specialist expertise and learning lessons from the crisis can help companies adapt operations in the shorter term while building for whatever lies ahead.