For many businesses in Scotland and the wider UK that are managing to survive, it has been a slow uphill struggle to resume operations. Some have needed to diversify their products or services, change their suppliers and lean on government support to ensure some degree of continuity.
Many have had to trim their workforces due to severely weakened demand and sluggish income streams. The pandemic has been a rude wake-up call for businesses of all types and sizes to honestly assess the integrity of their resilience and examine where vulnerabilities fester.
The very nature of Covid-19 as a novel virus and the sheer complexity of assessing the scale of its damage means that most businesses did not deem an outbreak like the one we are going through as a viable threat from which to seek protection. Only a few very large organisations were appropriately covered for a global catastrophe of this kind.
If any great lesson has been learned, it is that major changes are required, in terms of not only our actions but also our attitudes. Although crisis response-planning has its place, comprehensive risk-management, which may have been previously been viewed by some as somewhat of a luxury, will be rudimentary going forward to ongoing survival, growth and protection from future shocks.
Providing we continue to take the appropriate precautions, we may be able to avoid a second spike. We are already seeing on shop fronts signs for mandatory face masks, coordination measures for social distancing, and a shift to remote working wherever possible. Being truly resilient, however, will mean accounting for other risks that have been lingering in the air and that will gradually start regaining attention in a dramatically different world.
In addition to safeguarding from another wave of Covid-19, businesses must be prepared for the emergence of disruptive technologies, the impact of climate change, compliance with new regulation and, of course, the commercial challenges around Brexit.
No industry has managed to dodge the blow of the coronavirus, including the insurance industry, which is having to go through its own unique adjustment period. The pandemic has transformed an already multi-faceted risk landscape, and insurance companies have had to respond accordingly.
It is safe to say that the industry was already dealing with volatile market conditions for several years. Insurers are now looking to vastly reduce their exposure across different portfolios and tighten their overall capacity. However, this does not necessarily imply a gloomy outlook for Scottish businesses.
Despite the strained economic environment, businesses have a real opportunity here to improve their position to insurers and go forth in good stead. Beyond determining where insurance provisions previously fell short, businesses ought to review with their advisers their models, structures and processes to ascertain how they may be affected by shocks such as cyber-attacks, extreme weather and future trading restrictions.
With many companies offering employees the option to work remotely, there will also be a pressing need to deploy strategies that address the medium-tern risks around people-management and employee wellbeing such as continuous teambuilding efforts and easy access to mental health resources.
Business owners will be hard-pressed if they are unable to demonstrate to insurance companies not only their knowledge of the immediate and anticipated challenges in their sector but also how they are tangibly addressing them within their own organisation. This means being able to provide evidence of robust risk-management protocols, sufficient retrofitting of premises and watertight data security measures.
The current emphasis on health and safety management is undeniably vital to keep people safe whilst continuing to operate but the insurance implications of future-proofing following the experience of a protracted global pandemic cannot be overstated.
Businesses in Scotland are some of the best in the UK and our strength in sectors such as renewables, food and drink, and financial services is unparalleled. Our technology industry, which will support the hastening shift to increased digitisation, is growing faster than the overall economy.
Small and medium-sized enterprises account for over 99 per cent of private sector businesses and support millions of jobs. All of these deserve longevity, prosperity and the ability to withstand the prevailing uncertainty of the future.
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