The term “property risk” refers to risk events that specifically impact an organization’s facilities and other physical infrastructure. Risk events such as fires, adverse weather conditions, and terrorist attacks all fall into the category of property risk. In addition to damaging and destroying physical property, property risk events also have the potential to create stoppages in business operations and material financial losses.
Given the critical nature of property risks, Advisen Ltd., a provider of information and solutions in the business insurance industry, recently conducted a survey of risk managers, insurance professionals, and property brokers in order to obtain a high-level perspective on property risk management practices in the current business environment. This white paper, published in June 2013, provides an explanation as to how the survey was conducted, in addition to a summary of the survey findings.
The survey was administered to two groups of professionals. One component of the survey was sent to over 7000 “risk managers” working across a broad range of industries and company sizes. The other component of the survey was sent to over 4000 property brokers.
Survey questions were designed to generate data about what companies are doing to manage property risks as a component of their overall risk management efforts. Additionally, the broker survey was designed to obtain property brokers’ perspectives on what makes a “best-in-class” property risk manager. Many of the broker respondents could speak to this aim based on interactions with their clients’ risk management personnel.
Key Findings of the Survey
The survey produced a number of notable statistics related to property risk management, some of which were the following:
- 42% of survey respondents said their organization’s risk management department is not involved in decisions about building or acquiring facilities
- 54% of survey respondents said their organization’s risk management department does not have a role in managing supply chain risks (as they pertain to physical property), apart from purchasing insurance
- Amongst other attributes, brokers surveyed said “flexibility” and “adaptability” were key characteristics for risk managers to possess
Overall, this white paper from Advisen Ltd., along with the associated survey, sheds light on a singular, but critical, category of risk exposure facing enterprise risk managers. ERM practitioners working in any type of organization may find useful benchmarking information in this article that could improve their own organization’s risk management function.
Link: Advisen Ltd.
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