The Continuity Forum was the first to promote the direct linkage of Insurance and continuity practices. Our Continuity & Recovery 2000 report showed that few companies were able to see these connections, yet appropriate, thorough and company wide Continuity Management practices can clearly demonstrate to Insurers that risk mitigation has been carried out, enabling a lower risk profile.

There are no discounts for having Business Continuity Management in place, of course, but it is now becoming more widely recognised that effective BC can dramatically reduce your premiums, simply because your organisation can demonstrate that appropriate steps are in place, in advance, to reduce the potential costs to both your own organisation, and consequently to the Insurer. Investment in and commitment to BCM is effectively altering the Risk you pose an insurer, thereby reducing the costs and disruption caused during and following an event.

Rather than blame the Insurance Industry for rising policy premiums, the issue needs to be redefined and perhaps the point is that more companies really need to more proactive concerning the management of Business Risk, accepting that the likelihood of disruption is real and taking steps to prevent or mitigate the impact. When this is done the issue changes and places the spotlight firmly on the Directors. It is important to recognise that they ultimately have responsibility (to the stakeholders involved) for the decisions they take and that in the main they are ignoring or are overly optimistic about their capabilities in this area. We think that this is, frankly, not very professional especially in a climate of regulation that is introducing a far stronger legal connection between individual Directors and the Liabilities associated with their decisions.

By working closely with the Insurance sector, the Continuity Forum aims to promote best business practice, and to ensure that the end user base is aware of the need to work closely with their insurers, long before an event strikes, in order to best protect their business against all forms of 'disaster'. Our view is simple, a company that has undertaken a process of BCM will have identified key risks to the business and its processes, and should have taken steps to mitigate and minimise the effects of disruption in these area. This is substantially changing the risk profile of the organisation; in fact it is responsible management.

One of our first studies in this area showed that almost 2/3rds of events could be avoided if one implemented BCM. From an insurance perspective this can only be a good thing, especially as there are often so many exclusions detailed in the 'standard' polices provided. Companies need to enhance their resilience using a number of mixed methods to increase their ability to resist disruption, often in areas that are for the main part ‘uninsurable’ at present. Increasingly, the resources and expertise of insurance companies are focusing on the value that they can deliver in the risk management and business continuity 'sector'.

Through their activities, they are in effect delivering hard earned knowledge and experience of previous failures, effectively transferring vast knowledge on a broad range of events through their sales and consulting processes for insurance. In the past 12 months, the Continuity Forum has worked with at least half a dozen insurers keen to develop both services and products relevant to the sector. These organisations are keen to encourage greater planning and responsibility within clients. The skills and experience contained within the Insurance Sector are a vital industry resource and will provide vital resources and capabilities to the sector. This becomes even more clear, especially when one bears in mind that virtually all businesses and organisations carry some form of insurance, that this channel is going to be vital to the broader development of the BCM market.

A core part of our activities in the coming years will be to support the insurance industry in developing awareness within their customer base of the proactive value of BCM and to also encourage recognition of the altered risk profile a company presents once continuity is embedded within the organisation.

While it is still early days, we would expect this to be a real win-win situation for the insurance industry and its customers. The insurer should benefit from a lower level of risk throughout their portfolios, and clients should encounter a fairer, more reflective cost for the risk they pose the insurer.