Turning risk into opportunity for a resilient year ahead

With 2025 in full force, many business leaders are staring at a year likely to be summarized by one word: volatility. From shifting geopolitics and global conflicts, to economic unknowns and natural disasters, the list of potential disruptions is almost endless. With this volatility comes the accompanying risks and exposures that can derail growth, hinder business performance, exacerbate instability and weaken employee confidence. However, this doom and gloom mindset need not be the outlook.

As with any market-altering dynamic comes another dimension – opportunity. Opportunity to turn volatility into resilience-building measures that can create strength and even competitive advantage.

Creating strength to counteract volatility

Resilience building is the process of developing and strengthening the ability of individuals, communities, and organisations to withstand, adapt to, and recover from adverse situations, challenges, or disruptions. It requires agility and responsiveness to react during times of change. To become more resilient and face volatile dynamics head on, proactive measures around foresight, planning, and business continuity need to be an intricate component of the boardroom narrative.

With that, here are five key areas that may create adversity for businesses in 2025, and how taking some pragmatic steps around resilience-building can help to prepare and turn volatility into areas of strength. And these areas of strength can also create a more stable operation for people and organisations alike.

1) Be prepared to do more to adapt to extreme weather events – to protect your people and infrastructure.

The frequency, strength and unpredictability of weather events is an opportunity to be better prepared for the unknown and ensure your organisation can withstand its impacts. Having awareness of what risks are material to your business will put you in a strong position – and will also give your workforce, customers and suppliers the confidence that you’ve taken proactive measures to invest in resilience to safeguard your assets.

To be better prepared to face ever-changing climate conditions, our advice is to ensure you have access to as much relevant data as possible. Also, model risk into the future to assess your business’ potential resilience against the impact of yet-to-come events. From there you will be in a stronger position to prioritise where you need to focus organisational efforts, what investments your enterprise should make and what immediate contingency plans can be created to minimise potential disruption.

2) Test, build and invest in your cyber defense posture – to minimize exposure and ensure business continuity.

We operate in a hyperconnected world, where data omnipotence is critical to enabling the digital experiences we have come to expect. At the same time, today’s criminals are highly capable of penetrating the human behaviours, processes and technology that enable key operations. The ’attack surface’ of many organisations continues to grow, with an increasing dependence on integrating third-party products and systems which are often easy targets. The potential for painful business disruptions that can harm reputation and lead to financial losses are a very real by product.

Our advice is to gain a view of the threat scenarios most relevant to your sector as well as the maturity of your current security capabilities. This will allow you to rapidly quantify the scale of cyber risk you face and what tangible actions will contribute the most to protecting your enterprise. At the same time, consider a worst-case-scenario planning exercise to be ready with a speedy response – this can reduce the impact if the worst should happen. The opportunity here is being prepared, and this is crucial to ensure business continuity.

3) Prepare your people for the unknown – through contingency planning and communications.

One thing that is certain is constant change - and being prepared for volatility that demands change is often what separates the good from great companies. Ensuring your planning is well-known and well-rehearsed throughout your business, to ensure that your response is swift and seamless, will help the organisation and employees adjust plans and operations as rapidly as possible.

We recommend taking a strong look at your communications approach and how critical information is cascaded to staff, customers and suppliers in times of interruption – and create a playbook of sorts so key leaders have a plan of how to tackle issues as they come. Finally, take an introspective look across your supply chains and partner ecosystems, as their weaknesses can quickly become yours. Ensuring all parties have strong protocols and contingency plans in place is essential to being prepared for volatile moments. Your people need the confidence and clarity that you have adequate preparation measures in place – and 2025 will no doubt test our ability to react swiftly and methodically.

4) Learn from past lessons.

How are you strengthening your business based on the learnings from your insurance claims and previous loss incidents? This is a great question for leadership to ask. There are troves of data to examine trends and important take-aways that can help guide your risk mitigation planning efforts. This information can be used to justify key investments in areas where your business may have some hidden deficiencies or exposures that could cost you. Our advice is to engage with your insurance partner to examine the past to see where and how these lessons can become opportunities for your organisation through better planning. Learning from experiences can help shape a more resilient future and have you better prepared for what’s ahead.
  

5) The importance of claims defense can protect your bottom line and reputation.

Whether we like it or not, our litigious culture continues to grow as the sheer volume and reach of TORTs increases. How well prepared are you to defend yourself if you are with targeted litigation? We suggest engaging in a defensibility claims review to improve your approach to investigating accidents and defending claims. This will help your organisation to mitigate risk and ensure you capture information you need to defend claims more effectively – ultimately providing you with the potential to save significant financial resources and time.

Turn risk into opportunity.

While risk areas like the above present a number of challenges, we see these as important themes to create opportunity around this year. Opportunity to strengthen business processes, opportunity to leverage data to sharpen decision-making and forward planning, opportunity to instill new capabilities that can help to lower risk or exposure, and opportunity to build even stronger levels of confidence with your stakeholders. This in turn can have a powerful impact on creating organisational stability and strength that can help you to be prepared and have the true resilience needed to thrive in 2025.