How are businesses’ attitudes to risk and resilience changing?
- Published: Tuesday, 06 July 2021 07:22
Specialist insurer Beazley has launched the first in a series of reports that aim to provide a benchmark for business resilience to and appetite for risk post pandemic. The report also assesses the extent to which insurance is providing the safety net and support that organizations need.
Beazley’s Risk & Resilience series is based on a survey of 1,000 senior executives in the US and UK across 10 industry sectors plus additional insight from in-depth interviews with a panel of seasoned risk and insurance industry experts.
The first report: ‘New world, new risks: How are businesses’ attitudes to risk and resilience changing?’ is now available. It delves into executives’ sentiments towards four key risk areas: technology, business, environmental, and political & economic.
With COVID-19 having become the biggest catalyst of operational and strategic change in a generation, the report also examines how this health crisis has impacted leaders’ sense of resilience and ability to manage risk now and in the future.
New world, new risk: report highlights
- According to the research, 85 percent of leaders consider the current business environment to be moderate to high risk. It is technology and business-related risks that worry them most, however they believe them the easiest to manage.
- While 37 percent rank technology as the highest category of risk currently affecting their organization, this is followed by business (33 percent), political & economic (18 percent) and environmental (12 percent).
- Cyber is the technology risk highest on leaders’ lists of concerns however they also feel relatively well prepared to handle it, with 44 percent feeling ‘very prepared’ to manage their cyber risk.
- Like cyber, pandemic is seen as high risk yet respondents also feel well prepared to manage it. This sits within the ‘environmental’ category, which is the lowest ranked risk overall. This does not necessarily mean leaders do not worry about environmental risk but they may consider it less pressing or harder to directly influence than other risk categories.
Respondents ranked risks according to how significant they are to their business and in turn how resilient they felt to them. Where businesses arguably want more support from the insurance and risk management sector are within the high risk-low resilience threat categories. These include interconnected and more complex areas of risk including supply chain, business interruption, climate change, political, legislation and regulation, disruption and disintermediation, and environmental.
Nine in 10 leaders currently feel their businesses are either moderately (56 percent) or highly (35 percent) resilient, while there is a strong sense of optimism for the future with 85 percent expecting to feel more resilient in 12 months’ time.
Industry responses differ
Unsurprisingly there are wide disparities in how resilient different sectors feel to risk, with the force of the pandemic likely to be a key influence on current states of mind. Sectors that feel more resilient compared to 12 months earlier include technology, media & telecoms, financial institutions and, to a lesser extent, healthcare & life sciences.
Sectors feeling less resilient include hospitality & entertainment – perhaps one of the hardest hit by lockdown restrictions – and the public sector including education.