The importance of the Risk Engineering Program for councils: Building resilience and mitigating loss

Risk financing is an essential component of risk management, acting as a financial safety net to mitigate the impact of unexpected events. 

However, risk financing is not a comprehensive solution and only covers a portion of total economic loss. It does not address factors such as opportunity costs, loss of productivity, increased financing costs, reduced economic activity in the community, or damage to reputation. Therefore, it should only be considered as a measure for managing residual threats that occur after risk treatment. 

It’s beneficial to manage risks proactively and build risk resilience to avoid reliance on this coverage with studies showing that every dollar invested in risk mitigation can save six dollars in future costs.  

Building risk resilience positions councils to effectively respond to uncertainties, capture opportunities and respond to threats.  

The LGM Assets Risk Engineering Program plays an important role in helping councils build resilience. The program is undertaken with LGM Assets lead supporting insurer Zurich and their team of qualified Risk Engineers.  

This program assists councils in identifying, understanding and mitigating property and business interruption exposures. The aim is to reduce the frequency and severity of loss covered within the program while supporting councils in developing plans to help facilitate rapid recovery. 

The Risk Engineering Program focuses on continuous improvement through three main phases: pre-loss, during-loss, and post-loss. It includes a comprehensive review of existing business continuity, emergency response plans and a physical survey of nominated assets to determine current risk exposures. Councils receive practical recommendations to reduce loss frequency and severity and improve their ability to prepare for, respond to, and recover from events. 

Councils are encouraged to integrate these recommendations within their existing frameworks. Regular monitoring and review, along with the sharing of trends from claims experience and risk engineering program outcomes, ensure ongoing resilience building. 

For councils, participating in the LGM Assets Risk Engineering Program is a strategic investment in resilience. It not only mitigates the financial impact of potential losses but also enhances the ability to recover quickly and continue serving the community effectively. By focusing on comprehensive risk management and resilience building, councils can better navigate uncertainties and protect their assets and operations. 

Take proactive steps in ensuring your council’s resilience by contacting the LGMS Member Services Team, your Regional Risk Coordinator, or another dedicated LGMS representative for further information or advice on your council’s specific needs.