Risk cannot always be avoided, but it can be managed

by | Feb 21, 2022


The only sure thing in life

To change or not to change — if you are not willing to accept change, or change to adapt to the world around you, you could very well find yourself being left behind.

From the day you arrived on planet Earth, you have been subjected to a myriad of changes, and as you have grown through childhood to adulthood you have learned to adapt to those inevitable changes.

Change involves risk and risk forms part of life. It is the changing nature of risk that cannot be avoided but can and should be managed.

Whilst the principles of insurance (good faith, indemnity, and insurable interest) remain unchanged, the Fourth Industrial Revolution (also known as the digital revolution) has been changing the nature of the insurable interest (risk). An example of risk we can easily relate to, is money in transit. The need for the physical transfer of money by vehicle/person has been replaced by Electronic Funds Transfer (EFT) over an online network. As the transit risk has diminished, the cyber risk of money transfer has become a new reality. The risk of money transfer therefore still exists, however in a different form.

The insurance industry is ever evolving. One of the most important enablers of accepting and dealing with change and risk is a mind-set of continuous learning.

Managing risk is being knowingly proactive

Risk management is the process of identifying, assessing, evaluating, and controlling risk. If you can identify risk, you have the potential of managing risk. There are many ways to mitigate risk, whether it is a tangible property risk or a financial risk. One way of managing risk is to use insurance as a mechanism to transfer risk to a policy of insurance.

There are an array of insurance products available depending on what the risk entails and what the client needs to insure. An insurance broker is a professional who acts as an intermediary between their client and the insurance company.

Recommending insurance can be complex. Brokers will always act in the interest of their clients in finding a policy that best suits their needs. As a broker, you do research on behalf of your client to help them choose the policy that is designed or tailor-made to cater for their circumstances. It requires an intimate understanding of your client’s needs, as you are employed to advise your client in the best way possible. Ultimately, this process requires a specific set of professional skills and knowledge.

Brokers should be well-versed in offerings from all insurance companies. A broker has an important responsibility and role to help clients navigate between insurance products. Often these differences are subtle. Insurance brokers are there for the long run. You need to stay up to date with continuous change through self-driven learning. You must be knowledgeable to manage risk effectively.

Meeting regularly with your clients, brokers can review whether policies are still meeting needs in an ever-changing world. Due to the technical nature of construction and engineering insurance, it may be beneficial and advantageous for a broker to focus on becoming an expert in these technical niche insurance products.

Be prepared. Don’t risk not knowing

Learning removes the risk from being ignorant. Through continuous learning, you slowly but surely become a more skilled and knowledgeable professional.

In our industry, continuous learning and professional development are the pathways to success. By adapting to our changing world of technology and information, we become geared toward risk engineering and risk management.

Keeping up to date with change builds confidence, not only for the broker, but it is an effective way to win the client’s trust. Continuous Professional Development (CPD) is not only encouraged throughout the insurance industry, but it spreads right across the spectrum of Financial Services and other sectors of business. Continuous learning has become essential (if not critical) for brokers to achieve professional career growth.

You need to actively seek knowledge on current and future trends in the insurance industry.

The question is whether you can afford to be ignorant?

Embrace self-driven learning

There are a variety of resources a broker can consult to stay in the game:

    • • Reading textbooks, industry journals, newspaper articles;
    • • Enrolling for online courses and degrees;
    • • Watching videos and listening to podcasts;
    • • Attending insurance industry talks and seminars;
    • • Asking for help whenever something is unclear;
    • • Observing other brokers or colleagues who are more experienced in a particular field;
    • • Practising and applying new skills and asking for feedback from others;
    • • Aligning oneself with insurance companies that foster a culture of learning, and Making use of the Internet.

    Become an invaluable “asset” in risk management

    With good people skills, high energy levels, honesty, persistence as well as a passion for learning, technical understanding, and the knowledge of a wide variety of products, you can become an invaluable “asset” to your clients.

    Technology may be changing the world, but the human element in risk management and insurance is likely to remain firmly entrenched.

    With expert advice and trusted engineering insurance, your clients will have more peace of mind and feel completely confident about getting on with business.

    Consort places a high premium on education and training. We understand the power of knowledge and we encourage you to never stop learning. Your professional development is in your hands and there is nothing preventing you from being a respected broker.

    “A ship is safe in harbour, but that’s not what ships are for.”
    ― John A. Shedd