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Operational Resilience in Challenging Times

Operational Resilience in Challenging Times

These turbulent times present significant challenges to general insurance brokers, which directly places a lens above the professional practices and procedures each firm has in place.

The industry is striving to maintain ‘business as usual’ during this period of social distancing, while also handling an increased volume of client enquiries and operational issues.

Reviewing the data for firms rated to date shows that the industry has been well prepared to handle disruption, with over 95% of firms indicating that they have a business continuity and disaster recovery plan in place.

Operational resilience is always going to be tested when faced with unprecedented challenge, which is why the Gilchrist Standard team has extracted a few other key data insights from brokers that have undergone the assessment process, which highlight the measures firms should have in place:

  • 93% of respondents have an organogram which details the staff and group structure. It is an important requirement for firms as it helps to define and communicate corporate structure and responsibilities, which is crucial during these challenging times.
  • Does the firm have a regulatory business plan, which meets the regulator’s requirements? 93% of firms do have a plan, but as we are in unchartered waters, many plans will have to be reviewed and probably amended in the near future.
  • 83% of firms prepare an annual compliance strategy and subsequent compliance procedures and plan. As practically every firm is finding new ways of working, it is highly likely that these strategies and plans are being greatly tested and will probably be subject to review as a result.
  • Nine out of ten firms have a training and competence plan for their staff, and 93% of firms’ employees have individual learning and development plans. Remote working provides an opportunity to keep up to date with the CPD requirements of the IDD. While T&C and CPD may not represent a pressing concern, provision should be considered over the longer term.
  • The average number of people supervised by each supervisor (span of control) is 5. During remote working, direct supervision is going to be a challenge, enhancing the need for effective communication, record keeping and file checking.
  • 83% of firms have job specifications for all staff; if you are a firm that does not, you are strongly encouraged to consider implementing job specifications which clearly define the role each individual fulfils. Furthermore, only 66% of respondents have defined the firm’s standards for all key tasks. If your workforce is working remotely, defining standards and expectations for key tasks will help all parties to manage workflows while working remotely.
  • Remote working presents additional risks to firms, so it is encouraging to see that 100% of respondents have a data/information security policy and also have an IT support structure (either internal or external) to oversee IT systems.
  • 86% of firms also conduct regular (at least annual) staff training on crime and fraud prevention. It is worthwhile each firm considering reinforcing this training.
  • 98% of firms state that they have appropriate technical and physical security measures to protect personal data for both clients and staff, which is testament to the work done in readiness for the implementation of the Data Protection Act 2018. However, 24% of firms do not conduct regular (at least annual) reviews of their physical and cyber security,  including strength testing.
  • Nine out of ten respondents did indicate that data and cyber security formed part of their firm’s disaster recovery/business continuity plan, which is very encouraging.
  • 71% of firms do have a clean desk policy and while this may seem trivial in the face of current challenges, it is important to remember that policies can be adapted to account for remote working.
  • Only 45% of firms have a capability policy - this is an essential document for defining the key tasks and standards for each role. Clearly, this is important during this period of remote working.
  • 88% of respondents keep records of all client meetings and conversations. Accurate record keeping is essential, particularly when staff are not office-based which places strain on communication and interaction.
  • 100% of respondents indicated that their firm’s computer systems are regularly backed-up, however, as many firms now have staff working remotely, often on laptops bought recently, each firm is encouraged to ensure that systems are indeed being backed up.

Gilchrist Standard can provide a measure of professional practices and highlight measures that a firm should consider taking; beyond the assessment process, it is up to the firm to take the necessary steps, either on their own or with the support of external consultancies, trade bodies or suitable professionals.

If Gilchrist Standard can be of any assistance in helping to identify and mitigate risks during these difficult times, please do get in contact.

About the author

Gilchrist Standard

Gilchrist Standard

Gilchrist Standard is a ratings agency that allows insurance brokers to benchmark themselves against peers and an industry 'ideal'. It helps them better understand the suitability of their operation and to quickly identify and mitigate potential risks.