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How Businesses Can Play A Role In Insuring The Future By planning ahead, entrepreneurs can significantly reduce the likelihood of their businesses running into costly problems in the future.

By M. Rajendran

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Will the world be more or less risky in the future? The answer to this question depends on which type of risk we are talking about. With our health, for example, better medicines and better prevention, should reduce our risk of suffering from many of the most common chronic diseases. But what about workplace risks? Or the risk posed by the natural world around us? Let's take a look at each in more detail before exploring how a business can prepare for that future.

1. Future health
A 2018 report by the Economist predicted that the future of healthcare is to be dominated by personalization, precision and prevention, with the latter taking centre stage. There is good reason for this. According to the US Centre for Disease Control and Prevention (CDC), 75% of American healthcare spend is on chronic diseases which makes sense when the World Health Organization (WHO) reports that 15.2 million deaths worldwide in 2016 were due to heart disease and stroke alone. The bulk of these chronic diseases are caused by our own lifestyle habits, making prevention key. It's something we're all waking up to. Governments around the world are already implementing their own disease prevention programs. Individuals are using lifestyle trackers on their phones and watches. This strategy is vital. Especially when the Willis Towers Watson 2019 Global Medical Trends report shows that the cost of healthcare globally is outstripping inflation two-to-one. In the UAE, healthcare costs increased by 10.3% in 2018, and are predicted to hit 11% in 2019.

How can your business play a role in disease prevention? Despite governments pushing disease prevention, much of the work is likely to come from businesses. By putting wellness management and disease prevention at the top of your agenda, you'll be protecting your business from future risk in terms of spiraling healthcare premiums. Wellness programs come with well-publicized benefits including reduced sick days, improved productivity and lower healthcare costs. But they are a long-term strategy as well: a 2016 study published in the Journal of Population Health Management investigated the healthcare utilization and cost effectiveness of a personalized preventive care program in the US. It found that approximately 24% to 26% of members were cost effective in the first and second year. But that by the third year, 63% had hit this mark.

Related: Need To Protect Your Business? Here's How Risk Engineering Can Help

2. Future work
Automation and artificial intelligence (AI) are important topics at the moment. While most discussion has centered on what they mean for employees and job stability, you hear far less about what they mean for workplace risk. This is disappointing because ultimately the digital revolution is also a revolution in risk reduction.

A recent Willis Towers Watson report titled "Five Myths About The Future Of Work" was based on the results from the company's 2017/2018 Global Future of Work Survey. It found that 21% of EMEA responders expected the automation of work in their company to reduce risk or errors. For many industries, it will help make the workplace a less risky place and reduce employee liability, especially with repetitive tasks. A robot's output is entirely predictable.

How can your business reduce risk with automation and AI? This is a question that can only be answered by auditing your business needs. For example, all jobs can be split into tasks to better understand what can be automated and what requires human input. The human tasks are then rebuilt back into jobs. There are a huge number of tools already available to help companies automate elements of their business. For example, customer relationship management (CRM) systems can help with the control of big data. Automated accounting tools can automate approval and invoicing. And chatbots can keep up customer interactions without over-burdening staff. All of these come together to help reduce the risk of errors and cyber-crime.

Related: Five New Business Insurance Products You Might Need

3. Future environment
So far, we've seen that our overall health will likely improve through disease prevention, and our workplaces become safer due to automation. The same cannot be said about the environment. The Global Risk Report, published by the World Economic Forum, surveyed over 1,000 decision makers from the public, private and academic sectors globally. They predicted that over the next decade, the top three risks were all environment-related: extreme weather events, failure of climate-change mitigation and adaptation, and natural disasters.

To put this into perspective, these three were higher than data fraud/theft and cyber attacks, which came in fourth and fifth respectively. Businesses are already taking cyber-related issues very seriously, but remain less concerned about the impact of a changing climate. This is to their peril. For example, last year parts of Canada were hit by wild fires, catching companies out because historically the risk was deemed minimal. Here in the Middle East, rising oceans and drought are two threats sitting on the horizon. The World Bank, for example, has identified 24 ports in the region at risk of sea level rise.

How can your business mitigate against environmental change? Many companies are vulnerable to some kind of climate-related risk. For example, a company could purchase stock without fully considering how sudden environmental events could cause rapid price corrections. Or a company could find itself in an area of increased rainfall raising the risk of flooding and damage.

It's important leaders identify their business and strategic risk. Split these risks by location, as required, and then develop a mitigation strategy. This includes making sure insurance policies are fully up to date and flexible enough to deal with sudden environmental disasters.

The key takeaway here is that things rarely stay the same for long. In many ways the future may well be less risky, especially for our health and workplaces. But this is only the case if we take advantage of the programs and technologies available to us right now. By planning ahead, we can significantly reduce the likelihood of our business running into costly problems in the future.

Related: How Employee Benefits Can Help Your Company Attract Top Talent

M. Rajendran

Deputy Managing Director - Middle East, Al Futtaim Willis

M. Rajendran is the Deputy Managing Director- Middle East and CEO of UAE Division at Al Futtaim Wills. Prior to that, he was CEO of AXA Gulf Insurance. He has 28 years of experience at senior levels in both insurance and insurance brokers, with expertise in underwriting, claims, risk management, reinsurance, sales and marketing, and general management. He is a charted insurance broker, holds an AIRM qualification from The Institute of Risk Management and is also an Associate of the Indian Insurance Institute.

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