Risk management and mitigation: 7 things to think about in 2023

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By Dewald Cillie, Director, SATIB Insurance Brokers

The overall risk landscape in recent years has undoubtedly proven complex, but the resilience shown by businesses is commendable. As a result of the plans that organisations were forced to develop, implement and execute in the wake of the pandemic, most are now much more resilient.

However, to remain resilient, risk mitigation plans should be living documents that identify potential risks so you can develop an adaptive strategy to address them. With that in mind, here’s an overview of potential risks, so you can review your strategy for 2023:

General Crime

The economic downturn is likely to lead to an increase in criminal activity, meaning you’ll need to be vigilant when it comes to the security of your premises. To ensure the safety of your guests and employees – and protect your business from losses – take proactive measures such as installing the latest systems and deterrents and creating plans to respond to unforeseen events.

Extortion and Kidnapping

Business Leadership South Africa (BLSA) chief executive Busi Mavuso has noted that the country is facing not only an increase in violent crime but also increased extortion attempts. The number of kidnapping attempts increased to over 1,000 per month in 2022.

A risk assessment can help you identify and record any potential risks or criminal opportunities of this nature. It’s important to examine the impact of these threats on key areas of your business which may have a negative effect on the continuity of operations. Once you have a complete plan in place, it will be easier for everyone involved to know what steps to take to prevent what seems unimaginable;  how to respond during an incident; and what to do to recover afterwards.

Cybercrime

Organisations of all sizes are feeling the weight of cyber threats, with a 2023 global risk barometer ranking it as one of the biggest concerns for the year ahead. Political instability in numerous countries has increased the likelihood of a large-scale cyberattack, and ransomware is becoming an increasingly common phenomenon. In addition, data breaches have become more costly than ever before. It is not only large enterprises that face these risks but also small and medium-sized businesses that are seeing an increase in security incidents.

For companies to maintain cyber safety, it is essential to keep on top of the risks, prioritise IT security training, and update your cyber incident response plans and cybersecurity management.

Natural Disasters

In terms of their operations, companies face various threats due to the effects of global warming and related phenomena. Adverse weather events such as floods, storms or drought can result in valuable property being damaged and business activities being interrupted – as the dramatic flooding in KZN demonstrated last year.

It is important to be proactive about climate risks. The first step is taking an inventory of your essential resources and preparing for potential damage due to natural disasters.

Load Shedding

Perhaps the biggest stress for South African business owners today. Alongside downtime, power surges can damage sensitive equipment and increase the risk of fire and crime due to improperly functioning safety systems.

Load shedding is an unfortunate reality that will remain for the next few years. That’s why it’s important for everyone to take precautionary measures to reduce possible damages. Of course, despite these precautions, certain damages may occur, but it is the responsibility of all of us to be as prepared as possible for power interruptions.

Water Scarcity

The effects of reduced rainfall combined with rapid urbanisation and lack of infrastructure maintenance have led to severe water shortages in many provinces across the country. The potential impacts of water scarcity on businesses are far-reaching, ranging from economic to legal. Businesses could face business interruption, higher prices for resources and supplies, reduced production due to lack of supply, loss of customers and thus jobs, or even relocation as a last resort.

Civil Unrest

With growing civil discontent leading to increased civil unrest, companies must be aware of the potential threats to their facilities and operations. In these turbulent times, you must implement proactive risk management practices to guide employees during civil unrest. This can help protect against looting, destruction and arson by rioting crowds.

Given the increasing risks and reduced insurance capacity through SASRIA, obtaining additional and adequate Riot Wrap insurance for your business is paramount. To get an accurate assessment of your situation and determine what type of insurance you need, chat to an experienced broker. They will be able to provide valuable insight and advice – and ensure you are adequately protected.

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