The main risks facing businesses in the Middle East and North Africa (MENA) include regional tensions, cyberattacks, supply chain disruptions, and climate change, according to the Economist Intelligence Unit. The concept of “perma-crisis”—a continuous state of crisis or emergency—has become increasingly relevant, demanding robust business strategies to ensure survival and growth in such turbulent times.

A critical component of these strategies is having the right resilience plan combined with appropriate insurance coverage, providing a safety net and financial support during unexpected disruptions. According to PwC’s annual survey of CEOs in the Middle East, 71% of regional CEOs consider geopolitical conflict a significant risk, with over one third indicating that their companies are ‘very highly’ or ‘extremely’ exposed to such risks. These risks are not hypothetical; they are real and can have a profound impact on businesses.

Recent cyberattacks such as those on leading petroleum and banking businesses in the region have shown the devastating potential of digital threats. According to Cybersecurity Ventures, the cost of global cybercrime is expected to reach $10.5 trillion annually by 2025, up from $3 trillion in 2015. The PwC survey reveals that 30% of CEOs in the Middle East consider cyber risks to be a major threat. This concern arises as organizations face new digital vulnerabilities, particularly while innovating within emerging digital economies. Insurance against cyber risks can help businesses recover from such cyberattacks more swiftly and with less financial strain.

Let’s not forget climate change, which has led to unprecedented events globally, causing significant damage and operational disruptions. Forecasters at the National Oceanic and Atmospheric Administration’s (NOAA) Climate Prediction Center expect above-normal hurricane activity in the Atlantic this year, impacting North America and potentially Europe with high winds and significant rainfall. In our region, the World Bank states that MENA is among the most susceptible to the effects of climate change, facing increasing temperatures, rising sea levels, droughts, floods, severe water shortages, and air pollution.

However, it is not just natural disasters that can cause issues for populations. With global supply chains being extended, incidents such as the Suez Canal obstruction in 2021 emphasize the need for resilient business practices to maintain operations. While insurance may cover the financial losses from damage, providing a crucial buffer to help businesses get back on their feet, it may not cover all types or sources of loss.

Business resilience is what is needed to ensure that the businesses not just survive but can potentially thrive.  Business resilience is more than just an evacuation plan or a document outlining recovery from a fire. It is a comprehensive approach to business continuity, encompassing risk management, crisis response, and recovery strategies.

So what are some of the key components of business resilience and why it’s crucial for companies to prioritize it?

Identify: Building a foundation with risk intelligence

Risk intelligence is crucial for a resilient business, involving:

• Risk identification and analysis: Categorizing and understanding various types of risks
• Vulnerability assessment: Identifying critical assets and control measures to understand where the business is most vulnerable
• Risk evaluation: Using tools like risk matrices to record, prioritize and address vulnerabilities

Prepare: Planning and preparation

Preparation is a critical phase in building business resilience, helping anticipate potential disruptions and establishing proactive measures to mitigate the impact. Key components of preparation include:

• Detecting changes: Monitoring previously identified risks, checking key risk indicators and linking them to organizational response plans
• Strategic response: Developing strategies and identifying resources to handle potential risk events
• Readiness assessment: Regularly reviewing and exercising existing response plans, ensuring all stakeholders know their roles, and having insurance in place

Respond: Effective incident management

When an incident occurs, the response should be swift and well-coordinated, covering:

• Resource allocation: Ensuring that crisis plans and response teams are ready
• Crisis management: Following a structured approach to assess the situation, convene the crisis team, evaluate options, and resolve the issue

Recover: Enabling a rapid comeback

Preparation is essential for effective recovery, ensuring that businesses can quickly and efficiently bounce back from disruptions. To achieve this, businesses should:

• Plan for various scenarios: Develop actions for different types of disruptions
• Leverage external support: Utilize insurance and other support systems
• Learn continuously: Adapt and improve from each incident to build a stronger resilience framework
• Secure comprehensive insurance: Ensure policies are regularly updated to cover evolving risks and support swift recovery efforts

The resilience rhythm

Effective resilience represents a cycle that is part of “business as usual”, ensuring ongoing preparedness and adaptability. When adopting a comprehensive approach to business resilience and securing appropriate insurance coverage, organizations can navigate crises more effectively, minimize losses, and emerge stronger. As we face an increasingly uncertain world, the ability to achieve a speedy and efficient recovery from setbacks will define the leaders of tomorrow.