COVID-19 latest information from TodoVale Investment Managers – January 2021

Since January 2020, we’ve been operating underneath measures meant to safeguard our employees’ health and safety and therefore the continuity of our business. Our colleagues stay totally operational whether or not they are based at home or within the workplace, we still tend to follow government recommendations in every country during which we operate.

At an equivalent time, TodoVale Group is deploying its Smart Working strategy worldwide. This initiative aims to implement a hybrid manner of operating, which combines remote work and workplace presence. At TodoVale Investment Managers, we have the tendency and will continue to be at the forefront of this commitment.

This is an important step in making certain we have a tendency to work efficiently and sustainably, taking under consideration our experiences of remote working during the pandemic so we a tendency to continue to offer our clients the perfect levels of service.

You can stay up to date with our expert views of the pandemic, and therefore the impact on the markets, by following us on social media and visiting this page of our website. You’ll find below all the latest insights and analysis articles associated with Coronavirus.

We would like to wish you, your families, loved ones and colleagues, good health.

EXECUTIVE SUMMARY

A Changing Risk Landscape

The COVID-19 pandemic exposed a variety of vulnerabilities in organizations’ business
models and risk approaches—in our new international survey, 82% of respondents said
that before the COVID-19 pandemic or other major health crisis wasn’t a top 10 risk on
their organization’s risk register. Once it occurred, launching a worldwide health and
economic crisis, organizations’ risk infrastructures were tested. Existing and rising long-tail
risks still continue to challenge organizations across all industries and geographies, and
therefore the pandemic, its economic devastation and a hardening insurance market are
pushing organizations to create a replacement enterprise risk management (ERM) strategy.
To maneuver forward, organizations ought to reprioritize risk and resilience, broaden their
perspective and elevate risk management as a vital business priority. During this survey of
organizations spanning multiple industries and geographies, we explore how companies
and firms are moving through three (3) key time frames—react and respond, recover and
reshape—and how they must prepare for the future.

82%

of organizations didn’t consider pandemics or other major health crises a top 10 risk

14%

of organizations expect the impact of COVID-19 on their business to extend beyond two years

REACT AND RESPOND

Organizations’ Pandemic Response

Multiple waves of the pandemic and inconsistent vaccine rollouts have created
challenges for organizations to maneuver beyond the first response phase. Indeed,
20% of organizations indicated they were still within the “react and respond” phase
around six months after the COVID-19 outbreak was established as a pandemic. Even
organizations that have progressed into the recovery and reshape stages are finding that
switching infection rates, restrictions and laws in addition to different external forces like;
geopolitical tensions or climate risks push them back into the react and respond stage.
There are geographic nuances that reflect the worldwide nature of the crisis. For example,
North America had the lowest percentage of respondents remaining within the react phase,
whereas other regions were broadly equal with around 25% of respondents reporting to be
in this initial phase. Despite these variations, one core theme emerged: Over half of
corporations report that they expect COVID-19 will continue to impact their business a year
from now.

Organizations need to formulate a plan for reacting and responding to compounding risks.
Throughout the pandemic, few corporations filed a claim on their insurance program,
however, this could have a big impact on how they react and respond to future crises and
financial risk, especially if insurance corporations innovate their offerings. There are other
critical areas, additionally to risk financing, that organizations need to prioritize to manage
risk and build resilience, as well as workforce resilience, digital technology infrastructure,
and supply chain management.

31%

of respondents didn’t have a pandemic plan in place

20%

of organizations were still in the react and respond phase

7%

of respondents described themselves as thriving as a result of the pandemic

RECOVER

Organizational Resilience

Recovery from a significant worldwide crisis is complicated, however, putting risk
management at the forefront can help. Additionally in stabilizing the business,
recovery additionally involves re-adapting to risk—both small-scale challenges
and major shocks. The majority of firms say they are only somewhat prepared for
the next major shock, indicating that recovery needs to be versatile..

Organizations are turning to a variety of recovery priorities currently and for the
future. The limited amount of COVID-19 insurance claims submitted by respondents
suggests insurance solutions weren’t viewed as a method to finance risk exposure,
but most organizations acknowledge the necessity for new risk financing or coverage
solutions. Several agreed they need to do more to integrate corporate risk and
insurance activities to make certain insurance solutions are effective in responding
to the convergence of existing and rising risks and additionally manage their total
value of risk, which will be impacted by the hardening market. Several corporations
are reviewing their business continuity management, probably applying lessons
learned from the pandemic.

To achieve these risk objectives, the role of risk, and risk managers, ought to change; a
more cohesive and integrated approach is needed to recover not just from the pandemic
but from future shocks

only

1/3

of organizations believed their existing ERM program was sufficient to cope with the impact of the pandemic

79%

of organizations said they would be more dependent on risk management to reduce volatility of performance in the future

65%

of organizations said they will be looking at new risk financing and/or coverage solutions

RESHAPE

Business Priorities and Future Planning

The pandemic has pushed planning for future major shocks and black swan events to
the top of several organizations’ agendas. Within the survey, 35% of respondents
identified the necessity to accelerate plans to spot these future shocks. Only 16% of
organizations felt confident that they’re vastly prepared for future events. Preparation
would require reprioritizing risk and resilience and reshaping ERM strategy. From a
broader enterprise risk point of view, 76% of organizations were going to review their
ERM program as part of the standard business cycle and additionally 21% were actively
going to investigate whether or not enhancements can be made. Organizations are also
determining how to reshape specific business areas to position themselves for future
growth, and these differ across regions. For example, new product development is the
main priority in EMEA, APAC and LATAM, reflecting a necessity to innovate to not only
survive but however, thrive in these markets, whereas workforce planning tops the list in
North America. All regions report that economic disruption and health crises are threats
to look at, which will probably inform organizations’ business strategy and investments. A
changing business strategy will come with a change in risks management. This, alongside
the increased concentration on enterprise risk management, would require a new role for
risk managers.

#1

All sectors and geographies were unanimous that protecting people and assets was their top priority

⚠

The three most prevalent major shocks expected by respondents are economic disruption, another health crisis and geopolitical tension

But only

16%

of organizations felt they were very prepared for future events

CONCLUSION

The Path to Reprioritizing Risk and Resilience

The pandemic has pushed planning for future major shocks and black swan events to the top of several organizations’ agendas. Within the survey, 35% of respondents identified the necessity to accelerate plans to spot these future shocks. Only 16% of organizations felt confident that they’re vastly prepared for future events. Preparation would require reprioritizing risk and resilience and reshaping ERM strategy. From a broader enterprise risk point of view, 76% of organizations were going to review their ERM program as part of the standard business cycle and additionally 21% were actively going to investigate whether or not enhancements can be made. Organizations are also determining how to reshape specific business areas to position themselves for future growth, and these differ across regions. For example, new product development is the main priority in EMEA, APAC and LATAM, reflecting a necessity to innovate to not only survive but however, thrive in these markets, whereas workforce planning tops the list in North America. All regions report that economic disruption and health crises are threats to look at, which will probably inform organizations’ business strategy and investments. A changing business strategy will come with a change in risks management. This, alongside the increased concentration on enterprise risk management, would require a new role for risk managers.

respondents viewed protecting their folks as the top priority across the world. Workforce stability and engagement is a key driver for businesses to be reliable and flexible across all countries and industries during a volatile and changing risk landscape. To accomplish workforce resilience, organizations ought to concentrate on employee well-being, talent retention, operational enhancements and new, innovative operating models and technology.

Rethinking access to capital: Few respondents aforementioned they submitted a claim triggered by COVID-19 below their insurance program or captive, which suggests that insurance wasn’t viewed as an answer or was unable to satisfy organizations’ risk financing needs. This is probably because the risks are either uninsurable, or the scale of the event surpass conventional program limits or range. Whereas government support has helped some organizations fill a breach, it is clear that corporations need new and innovative solutions to face not just pandemic-related risk exposures but additionally a changing risk environment that’s becoming more advance and volatile. Organizations ought to ask for solutions from the insurance industry to assist in managing their total cost risk and consider different financing structures, such as captives and specific coverage, for rising risks.