You Think Political Instability Is Crazy Now? Half of Business Leaders Surveyed Said It’ll Only Get Worse
Risk is global; confidence is local.
That’s what the CNA Hardy Global Risk and Confidence Report concluded after surveying 1,500 business leaders from multinational firms across the globe.
In total, 82 percent of business leaders believed they operate in a moderate to high risk environment. Twenty-two percent cited economic risk as their top concern, with cyber risk following close behind at 19 percent.
These numbers, the report concluded, stem from several factors, with global tension and political risk leading the forefront. Forty-eight percent of respondents cited Brexit as a driver of their concerns, while 34 percent added the global trade war tensions add to their precaution.
Predicting Growth, Wary of Risk
CNA found that in North America, 64 percent were confident in their business’ ability to grow.
Across the pond, the proportion falls to 60 percent for Mainland Europe. The UK, facing a looming Brexit, was more uncertain, with only 39 percent of leaders confident in their business’ potential for growth.
As for Asia, where respondents are wary of trade war fall out, only 53 percent of leaders said they were confident in their business’ growth potential.
In addition to economic and cyber risks, respondents cited technology risk (14 percent) and political risk (13 percent) as their numbers three and four top risk concerns. In fact, almost half of the respondents (42 percent) think political risk is likely to increase within the next six months.
Technology: From a ‘Near Risk’ to Global Top Three
Technology was a critical area of spend among respondents, noted the report. Seventy-four percent of leaders said they are prioritizing technology, while only 14 percent answered they are cutting back on tech spend.
“Often expansion is facilitated by technology,” read the report, “which offers access to new markets literally at the touch of a button. On the plus side, technology does everything businesses could ask for: enabling more efficient operating, improving customer engagement – even delivering step changes in performance.”
“Insurance has a key role to play in helping companies to get that risk management right, both in prevention and incident response.” — David Legassick, head of technology and cyber, CNA Hardy
But on the other end, “it’s a myth that technology inevitably makes companies more nimble and flexible.”
That is also why technology moved from being a ‘near risk’ in a CNA Hardy May 2018 study to one of the top three concerns of business leaders today. Additionally, 37 percent believe technology risk will increase in the next six months.
“Anxiety about the role of technology is also reflected within the sector’s leadership,” the report said. Fifty-nine percent of respondents are confident about the future, but 17 percent remain cautious about the weight of expectation placed on tech advancement and the risks that they could face.
Breaking Down Cyber
In the May 2018 CNA survey, cyber was considered the #1 top risk. This time around, it took second as the most concerning risk for business leaders.
CNA Hardy discovered that while small- and mid-size businesses tend to be the most vulnerable to cyber threat, large corporations are most concerned about this risk, with nearly 50 percent of leaders predicting cyber risk will increase in the next six months.
“There is a chronic shortage of cyber security skills and this will continue as new technology like the Internet of Things (IoT) amplifies creating more insecurities,” wrote David Legassick, head of technology and cyber, CNA Hardy, for the report.
“This means the gap between risk and mitigation, exposure and cover will continue to grow. Insurance has a key role to play in helping companies to get that risk management right, both in prevention and incident response,” Legassick said.
The main goal of the CNA Hardy report was to review and come to an understanding of how the mood in the market is changing internationally and where insurers should focus their discussions with clients.
The 1,500 business leaders surveyed ranged from businesses with turnover of $6.5 million to up to more than $1.3 billion, and they came from sectors ranging from manufacturing and construction to tech and life sciences.
The study goes one step further and analyzes each region in detail, from North America to Asia Pacific, Mainland Europe and the UK. Read the full report here. &