5 Emerging Risks in the Wood Pulp and Paper Industry

In an era of escalating risk profiles, hardening property insurance markets, and environmental unpredictability, resilience is the key to sustainability for the wood pulp and paper industry. As risk managers grapple with these challenges, they need innovative solutions – and fire risk engineering is taking a central role in this evolution. 

1. Navigating a Hard Insurance Market

The property insurance market has become increasingly hard, with carriers consistently raising premiums and reducing capacity to cover large-scale industrial risks. This environment is especially difficult for businesses in areas prone to natural catastrophes like hurricanes, facing high premiums or even struggling to secure coverage. 

In such circumstances, it's crucial for risk managers to present their organization's risk profile as best-in-class to insurers. Achieving this necessitates an industry-specific, comprehensive understanding of fire risks. Fire risk engineering can help by identifying problems with electrical systems, equipment breakdown, and natural hazard risks. 

2. Growing Need for Business Continuity Planning

The concept of a resilient business has evolved; it's no longer just about survival during adversity, but also about thriving despite supply chain issues or threats of business interruption. This shift has made business continuity planning paramount, particularly in the wood pulp and paper industry. 

Fire risk engineering plays a pivotal role here. By identifying potential fire hazards and providing recommendations to mitigate them, it ensures business continuity and readiness to minimize business interruption possibilities.

3. Retaining Risk and Investing in Resilience

As insurance costs skyrocket, risk managers in the wood pulp and paper industry are increasingly considering self-insurance or other risk retention strategies. However, this requires a high degree of confidence in the organization's risk control measures, resilience, and overall risk profile.

A fire risk engineering inspection provides the confidence needed by uncovering vulnerabilities and addressing them, allowing organizations to demonstrate their commitment to comprehensive risk management and sustainability.

4. Data, Analytics, and a Holistic View of Risks

Harnessing the power of data and analytics is crucial for making informed decisions. A fire risk engineering inspection generates a wealth of data, providing insights into potential vulnerabilities, patterns of risk, and the effectiveness of mitigation strategies. This data-driven risk management in the wood pulp and paper industry supports a holistic risk assessment, considering macroeconomic trends like supply chain volatility, limits of CBI insurance, and the increasing unpredictability of natural catastrophes due to climate change.

5. Adapting to Tech Innovation and Cybersecurity Threats

As technological innovation permeates the wood pulp and paper industry, cybersecurity threats and the associated machinery and equipment risks have emerged as significant risks. A fire could result not just from traditional hazards but also from cyber incidents affecting industrial control systems. A modern approach to fire risk engineering must consider potential cyber-physical threats.

In conclusion, fire risk engineering inspections are an invaluable tool for risk managers in the wood pulp and paper industry. They offer a detailed, data-driven understanding of fire risks, enabling organizations to enhance resilience, navigate challenging insurance markets, plan for business continuity, and adapt to emerging threats.

As the risk landscape becomes increasingly complex, it's time to put fire risk engineering at the heart of your organization's risk management strategy.

TÜV SÜD Global Risk Consultants is the leader in risk engineering for the wood products and pulp-and-paper industries, serving pulp and paper operations, sawmills, logging, wood and lumber remanufacturers, and more. We have delivered $20.7 billion in loss estimate reduction for our clients since 2004 in 13,306 recommendations. How can we help your business? Contact us to find out.