From: Risk & Insurance

COVID-19 revealed weaknesses in traditional methods of risk management. The lessons learned can help create a stronger global economy.

If there’s one thing that experts agree on concerning the impact of COVID-19, it’s that things cannot go back to the way they were.

The way businesses interact with suppliers, vendors, employees and customers could change permanently. Standard approaches to risk management no longer suffice. As the worst of the pandemic passes, the world will have to settle into a new normal.

Disagreement arises over just what that new normal will look like.

One of the key challenges for businesses will be recovery of income lost during mandated shutdowns. It’s not yet clear who will pay for those losses, if anyone at all.

Supply chain management is also in the crosshairs. The weaknesses of running lean showed risk managers they will have to rethink how to balance efficiency and exposure to disruption.

The global crisis has also highlighted the limitations of insurance and will force a re-evaluation of how best to minimize and finance risk.

If the insurance industry was already reimagining its role as a service provider more than an underwriter of products, the pandemic will only accelerate that shift.

In all these changes, though, there is something of a silver lining — opportunity for innovation and creativity.