Whether it’s inflationary pressures, natural disasters, cyber vulnerabilities, employees’ wellbeing, or customer safety, businesses of all types and sizes face varying internal and external risks, many of which can have devastating financial consequences without the right mitigation strategies in place.
In an economic environment mired with uncertainty, organizations need to be deliberate and strategic in how they spend their budget and protect their balance sheet.
Though you might be tempted to shop for insurance based on price tag alone or pass on certain types of coverage altogether, this is a mistake you don’t want to make. Adequately structured coverages and limits can offer significant financial protection in the wake of a triggering event, making insurance one of the best investments you can make for your business.
How should you determine which loss control strategies and insurance you should invest in?
Not all businesses share the same risk profile, as it depends on industry, size, location, and other unique factors. This is where data analytics and risk quantification enter the fray. Significant technological advancements offer an opportunity for risk mitigation strategies to better adapt to evolving, complex exposures. Now more than ever before, risk analytics techniques and technologies allow us to measure, quantify, and predict risk with more certainty.
Make use of data analytics and technology
From risk identification, assessment, and prioritization to loss control implementation and result evaluation, your approach to protecting the financial viability of your organization or business should include data analytics, every step of the way. Using analytics and risk modeling to identify, measure, prioritize, and predict risk based on data points unique to your business helps you glean meaningful, actionable insights that better position your organization to reduce the likelihood of a catastrophic loss.
Ultimately, the process should answer the following questions and paint a clear risk narrative that’s digestible for internal stakeholders (risk managers and the c-suite) and carriers alike.
- What risks are we most susceptible to?
- Why are we most vulnerable to certain risks, and what can we do about it?
- How can we best manage the totality of our risks through loss controls or risk transfer?
- What are the financial consequences to the business if these risks are actualized?
- How can we continue to improve our risk management strategy as our business evolves?
Why you should care about data analytics and risk management
In a challenging economic and regulatory environment, it’s no longer enough to approach a risk management strategy with intuition alone. Applying modern analytics tools and techniques to risk management helps you pull together threads of risk into a unified system that can provide clarity and sound decision-making guidance.
Here’s why risk analytics are a vital part of managing risk:
- A data-driven approach matches your capabilities to your needs.
- Data analytics make you more adaptable to risk, and thus more competitive.
- You can identify and predict trends to solve problems and minimize costs.
- Analytics help you monitor your performance and mitigate risks.
- You can identify coverage gaps and overlaps, which amounts to cost savings.
- You’re able to identify and prevent repetitive loss patterns.
- Your risk is more favorable to insurers if they see that you’re taking a proactive approach in managing it, which is more likely to result in better premiums and terms for coverage.
- An analysis of your risk can provide negotiation leverage with carriers, especially if there are significant discrepancies between benchmarking results and carrier results.
A partnership that delivers results
Knowing how to use data analytics and digital tools to bolster your risk management strategy is challenging without proper guidance. Our Advisors have access to proprietary risk mapping technology that provides a holistic picture of your risks and correlates your organization’s unique risk data points to exposures by using advanced analytics models. We contextualize our findings within your company culture and industry to deliver the best results, which allows us to provide recommendations about how you can best invest in insurance and loss control strategies to protect your business from the unexpected.
Connect with us today to learn more about our customized and consultative approach to risk management at www.bks-partners.com | 866.279.0698
Disclaimer: This material has been prepared for informational purposes only. BRP Group, Inc. and its affiliates, do not provide tax, legal or accounting advice. Please consult with your own tax, legal or accounting professionals before engaging in any transaction.
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