Simplicity is the key for businesses when developing a disaster response plan, according to experts who shared their views on the subject of property risk mitigation during an Aon Web seminar.
The seminar, titled "Prepare to Respond: Key Steps To Mitigate Property Losses On A Global Scale," addressed challenges that companies face in the wake of a disaster and discussed solutions to those challenges.
Speaking to chief risk officers and chief financial officers, Arnold Mascali, managing director, Global Rapid Response model for Aon, stressed the importance of businesses having an effective plan in place in the wake of a disaster so that business operations can resume as quickly as possible. He said that an immediate and decisive response is just as important as preparation and planning when it comes to disasters.
"Some losses are inevitable, but the extent of those losses can be reduced," Mr. Mascali said.
One key to an effective plan, according to Mr. Mascali, is coordination of recovery and mitigation. The mitigation mindset, he explained, should not override a basic recovery plan. He noted that the general rule for reducing business interruption is "simply to get back into business as soon as possible." He added, "Don't out-think yourself. Keep it simple."
Companies also need to make sure that growth plans and the spread of operations do not outpace recovery plans. Mr. Mascali pointed out that while the size and reach of companies have increased in recent years, the development of effective recovery plans has been slower.
A recovery plan must also take managing the experts into account. Mr. Mascali said that a company will have to be in contact with restoration contractors, building experts, code experts, adjusters, accountants, etc. "If it's your job to coordinate this group, I would say good luck if you don't have a plan in place," he remarked.
A chief financial officer or risk professional will also have to receive and manage calls from many other vital but competing interests after a disaster, including from company executives who will want to be updated. If the disaster is widespread, then calls from third-party interests, including political figures, government officials and law enforcement, will increase. "The answer, of course, is to simplify [the process]," Mr. Mascali said.
To help accomplish this, he said the idea is to keep in mind whether each decision is minimizing business interruption. To that end, a key factor is coordination without duplication. Once the plan is set, Mr. Mascali said, a risk officer must let people do their jobs. "So keeping it simple also means trusting in your team members, relying upon them, and trusting in your plan," he said.
The real test for a chief financial officer or risk professional in the wake of a disaster, Mr. Mascali observed, will be his or her ability to act and react to emerging circumstances.
To view the seminar in its entirety visit www.aon.com/webseminars.
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