Hazardous industries ready for leap towards dynamic and simulated risk assessment

03-09-2020

Businesses are making the leap from conventional siloed, static risk assessments to dynamic, real-time risk identification and management, according to the “2020 Process Safety Management and Operational Risk Management Survey Report” from Sphera, a global provider of integrated risk management (IRM) software, data and consulting services.

Sphera said this leap into innovative software and technology deployments allows companies to make better business decisions across the organisation. An interoperable, data-driven approach to process safety and operational risk promises new predictive insights that were previously unobtainable.

The COVID-19 pandemic, along with fluctuations in oil and commodity pricing, has impacted operating margins, yet has given many companies the opportunity to consider their technological capabilities related to visualising, forecasting, simulating and mitigating major hazard events while assessing their operational resilience.

“Being operationally resilient means being able to maintain or optimise operations during unexpected business shocks,” said Scott Lehmann, Sphera’s vice president of product management for operational risk management (ORM), who co-authored the 2020 survey report.

“Many companies found themselves wondering whether if they had embraced simulated, dynamic risk management tools earlier they would have seen less of a shock manifest itself throughout industry when the pandemic accelerated and oil prices ran out of steam.”

Like the previous surveys, the results highlight the importance of technology to improve process safety and ORM. Virtually all the respondents (91 percent) said technology has made their companies and workers safer (up 11 percentage points from last year).

While companies are taking safety seriously—88 percent say safety is part of corporate value structure—industry leaders report significant gaps (81 percent) between process safety intent and reality.

Half of the respondents (51 percent) only review risk every one to six years, 53 percent are assessing only a portion of their facilities, and just 68 percent are able to complete their scheduled asset integrity inspections. This results in incomplete, lagging risk indicators with only 37 percent proactively managing process safety.

Digitisation allows companies to make an unprecedented leap in collecting and analysing operational risk data in real time. Unsurprisingly, six out of 10 survey respondents said they are investing in technologies to create data-driven business processes across the organisation, integrating environment, health, safety and sustainability (EHS&S) and ORM data, and half (52 percent) said they are investing in solutions to map dynamic risk pathways.

“The technology which connects the dots, joins the disparate processes and workflows, and illuminates the operational reality in real time, simply hasn’t existed until now,” added Lehmann.

“Companies that embrace these technologies will finally be able to achieve a holistic, end-to-end view of their operational risk.”

Sphera, Report, Integrated risk management, Coronavirus, Risk Management, Insurance, Reinsurance, Europe

Intelligent Insurer