When people think about operational resilience, insurance isn’t always top of mind. Frameworks and regulatory compliance tend to dominate the conversation. Yet insurance has a critical role to play.
Take the recent wave of cyber incidents in the retail sector. For organisations with the right cover, insurance helped soften the financial blow and accelerate recovery. For others, the absence of cover raised tough questions at Board level: If this happened to us, would we be protected?
Insurance won’t prevent disruption, but it can mean the difference between a swift recovery and a prolonged crisis. When aligned with your operational resilience strategy, it becomes a powerful tool for demonstrating value to your organisation.
Operational resilience starts with understanding what could go wrong. All financial institutions identify their own “severe but plausible” scenarios, from cyber-attacks and supply chain to loss of undersea cables and severe weather events.
At WTW, we’ve developed a taxonomy of resilience events, grounded in proprietary data and industry research, to help organisations map their risks more effectively.
The clearer your threat landscape, the more precisely your insurance can be aligned to support it. The table below outlines how traditional insurance policies typically respond to key scenarios in our taxonomy.
| Risk Theme | Scenario description | Traditional Insurance Policies considered | |
|---|---|---|---|
| 1 | Cybersecurity | Unauthorised access, attacks, or damage to information systems and data. | Cyber and Crime |
| 2 | Natural Disasters & Public Health | Disruptions from environmental events and natural phenomena. | Property and Business Interruption |
| 3 | Physical Safety & Security | Acts of violence, unrest, or threats to physical assets or individuals. | Terrorism |
| 4 | Technology | Failures in hardware/software impacting key systems. | Cyber and Professional Indemnity |
| 5 | Critical National Infrastructure | Failures in essential national systems and services. | Typical exclusion in Cyber and Property/Business Interruption |
| 6 | Third Party, Outsourcing and Supply Chain | Failures with external providers supporting critical operations. | Cyber |
| 7 | Key Personnel | Loss or unavailability of key staff. | Limited coverage under Employment Practices Liability / Employers Liability |
Here’s a simple checklist to assess alignment:
01
Align policies with your most severe but plausible risks. Identify gaps/overlaps. Where gaps exist, explore alternative solutions like parametric insurance.
02
Use internal or external tools to link disruption costs to policy limits, deductibles, and time thresholds.
03
Ensure policies activate before your impact tolerances are breached, especially for cyber and business interruption.
04
Assess supplier dependencies and confirm they’re reflected in your insurance strategy.
05
Leverage policies that offer live crisis support and ensure claims processes are integrated into your playbooks.
Operational resilience is a board-level priority. Insurance managers are uniquely positioned to bring fresh value to the table, by showing how insurance can support resilience goals and protect important business services.
Take supply chain disruptions, a common concern. In our recent survey, 88% of respondents said insurance is essential for managing supply chain risk. More firms are recognising insurance as a key enabler of both operational and financial resilience.
The goal is to maximise your insurance return on investment. Are you choosing the right insurance for your resilience needs? Are your policies aligned with your most critical risks? Are these efforts visible at Board level?
If you're exploring these questions, our Operational Risk Solutions team is here to help. Contact us to learn how we help clients integrate insurance into their operational resilience strategies, combining proactive planning with effective risk transfer.
