In the complex and highly challenging environment in which mining companies operate, managing risks is key to success, says Gail Nicol, senior mining specialist at JLT South Africa. “The more prepared you are to manage risks, the better,” says Nicol, “and that means ensuring that you partner with a broker that understands all the risks that span the mining project life cycle.” The role of every risk manager, in her view, is to provide a structured approach to assessing and developing a risk-aware culture and to help mitigate risk across the entire organisation. “Many organisations will employ a professional risk manager on a full-time basis while others will manage this function internally. Depending on the size and needs of the organisation, it may be more beneficial to outsource the role to dedicated risk management professionals.” And those professionals, in her view, should have extensive expertise in the mining sector and a comprehensive understanding of the challenges the sector faces – and how to communicate these challenges both externally and internally. “In a nutshell, they should know the risks your business may face, and how to help you overcome them.” Since losses are bound to happen, companies that take a proactive approach can significantly limit the scale of those losses, says Nicol. “Having a dedicated risk management professional means that they are familiar with the factors that are frequent contributors to major losses, and can work to mitigate those factors wherever possible. “Having a dedicated resource also means that staff previously encumbered with risk management responsibility are now freed up to focus on the core business.” And Nicol believes an “off the shelf” generalised approach is not the answer. “Insurance programmes must be designed to respond to the mining sector risk profile.” This will involve identifying risks that need specialised treatment and adopting a strategic risk engineering programme that serves the needs of the business and supports a greater risk management approach. Also key is the support of long-term underwriter partnerships at a time when markets begin to stabilise or harden, she points out.
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Insurance programmes must be designed to respond to the mining sector risk profile. – Gail Nicol
