Risk managers are facing increasing pressures in preparing for catastrophes.
A report by the Economist Intelligence Unit highlights the lack of time and resources available to many risk managers. This has led to catastrophe planning for events such as avian flu, power outages and extreme weather being deprioritised.
More than 50% of the 400 global risk managers surveyed indicated that they had not been able to develop detailed contingency plans for high-impact events.
And 40% of respondents indicated that they did not view these events as a priority.
Of those risk managers that have managed catastrophe risk, 57% have used scenario planning. And insurers are seen as key to the process, with more than 40% of risk professionals having liaised with their insurance companies.
Commenting on the findings, Brian Owens, chief catastrophe risk officer at ACE European Group, which sponsored the report, said: “These findings confirm the effort the risk management community is putting in to driving their organisations to prepare for catastrophe but highlights the difficult conditions in which they are working.
“With competing pressures on time and resource, planning is yet again being forced down a short term track. While the effects of today's problems such as power outages can, of course, be devastating, the world is changing around us and new threats such as avian flu, climate change and terrorism are moving up the agenda.
“With little direct experience of these problems, it's too easy for organisations to view them as someone else's problem. The hard fact is that a year on from Hurricane Katrina, many businesses based in New Orleans have still not recovered. Dreadful events like this just confirm the critical importance of effective planning and preparation.”
