Companies should be prepared for disaster management

Companies need to clearly outline their delivery of services and products and map out their market requirements to best prepare to manage a disaster, according to Peter Berring, an expert in the risk and insurance market.

Mr Berring, Principal of PB Risk Management, an independent insurance and consultancy company, will today address the third session of the Directors Forum 2010 entitled Contingency, Disaster Planning and Directors and Officers Liability at the Exchange Buildings, Valletta.

Speaking to The Times Business, Mr Berring said that understanding one's business impact and recognising both the expected downtime and contingency position allow companies to manage the expectations of their stakeholders.

"Clarity following such an impact can do a lot to turn the situation into a positive and protect your brand. Failure to deliver clarity in this environment can be disastrous to a company's future at the least impacting on their market share and in the worst case resulting in the company's demise," he said.

Mr Berring said that contingency planning allows for rapid response to an incident. At such times, with the speeds involved in modern business and media, it is vital that a company be seen by its customers and stakeholders to be in control of its position.

"It is also true that proactive contingency planning will accelerate the continuity response and minimise the costs involved in the event," he said.

Asked how the global financial crisis affected the risk and insurance market across the world, Mr Berring said: "I feel the credit crunch has had many effects. Many organisations have dramatically reduced their budgets as a result with impacts on their investment in loss prevention and risk management. The insurance industry has struggled as their access to capital has become more difficult. At a time when the global insurance capital base has been eroded this causes more pressure to drive for a hardening market.

"There is little doubt that the insurance market will need to rebuild its capital base. In fact with Solvency II on the horizon (January 2013) capital will definitely need to be increased in many areas. As investors do not appear to be excited in adding to the present capital the only way in which such capital increases can be achieved will be through rate increases. It is also true that the longer we wait for the correction to be made the more dramatic the increase will be!"

The Directors' Forum 2010 is a joint initiative of the Malta Chamber of Commerce, Enterprise and Industry and the Institute of Directors (Malta Branch).