Social media is causing an interesting convergence of sectors within technology, media and telecommunications (TMT). Technology firms are finding themselves becoming social media companies. Telecommunication firms are finding themselves in the tech business. It’s not exactly “dogs and cats living together… mass hysteria!”, but the interplay between these three industry sub-sectors has created a unique risk profile for companies involved in these overlapping spaces.
The Changing View of Risk
Understanding both today’s strategy and the near and distant future strategy is important in evaluating and managing the risks faced by social media across the TMT landscape. This includes engineering their risks much as they have engineered their business process. It can start by understanding risk and tolerance levels, followed by examining individualized programs and optimizing those programs for efficiency in property, casualty, and management liability.
Finding and Managing Alternatives
Moving forward, firms can take a longer strategic view of these optimization efforts utilizing best-in-class analytics. Many companies will consider various options such as captives and risk financing vehicles. As companies grow and increase in complexity, they may find that standard insurance is no longer an optimal option for them. They will start taking a more serious look at the “black swan” or catastrophic events.
Identifying Your Position
With the changing landscape of convergence across industries, understanding where you are in the continuum and where you need to be in regards to risk management is crucial for both short-term and long-term success for companies involved in the technology, media and telecommunications arena.
I discussed these issues with WillisTV recently. Take a look.