LONDON--(BUSINESS WIRE)--
A new wave of interrelated, fast-changing risks, reflecting rapid
changes in the global economic landscape and the increasing role of
technology and multinational expansion as growth drivers, tops the list
of concerns for businesses across Europe, the Middle East and Africa
according to new research published today by ACE European Group.
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President of ACE European Group, Andrew Kendrick (Photo: Business Wire)
Risk managers identify technology, supply chain and regulatory as the
“big three” risks currently causing their organisations the greatest
concern, according to a survey of 500 companies in Europe, the Middle
East and Africa conducted for global insurer ACE’s Emerging Risks
Barometer 2015. People risk sits just outside the top-three, while
geopolitical risk completes the top-five emerging risk categories.
Risks currently causing the greatest concern for businesses in
Europe, Middle East and Africa
43% of businesses say that technology risk – which
includes cyber-attack, data loss and business interruption as a result
of systems failure - is currently among their greatest concerns.
Tech also tops the list of risks that businesses expect to have the
biggest financial impact for their operations in the next two years.
Technology plays a critical role in almost every business’ strategic
planning, yet, the research shows that companies may not be focusing
their efforts in the right areas, due to a lack of knowledge about the
most likely sources of threat. It is indicative that less than a quarter
(23%) of respondents say their biggest concern is violation of customer
data, in spite of the huge potential financial and reputational cost of
such attacks.
Supply chain risk ranks second, named by 31%. Supply chain
topped the 2013 Barometer, and remains a top concern for businesses two
years after. With more companies expanding into new and often emerging
markets – using more complex and extended networks of suppliers and
partners – the supply chain is at once a growth enabler and a key source
of risk. However, in what is one of the survey’s clearest indications of
how different areas of risk are increasingly interconnected, businesses
are now less concerned about interruption caused by natural disasters
and are focusing on issues that can severely harm their corporate
reputations. Survey respondents rank unethical labour practices as their
biggest supply chain worry. More than six out of ten (61%) admit they
cannot always vouch for the ethical and trading standards of every
company on which they rely.
Regulatory and compliance risk ranks third, named by 27%. As
companies pursue growth on a global scale, regulation is becoming an
increasing source of concern with multinational organisations now facing
a patchwork of regulatory regimes across markets and jurisdictions.
Importantly, 56% of respondents say their company directors may not
fully understand the governance and compliance requirements in every
country for which they have oversight/responsibility. Seven out of ten
risk managers are concerned that regulatory demands are diverting
resources from other areas of the business.
Andrew Kendrick, President, ACE European Group, said:
“Our survey results show that European businesses are now facing a
landscape of new, complex, risks that change at an astonishing rate,
defying previous categorisations. In this new environment, piecemeal
responses will not succeed. Effective action will require board-level
commitment, an integrated approach, and the development of a clearly
understood risk management culture across organisations. These
imperatives are not new, but their urgency is increasing.”
“Encouragingly for the insurance industry, this report suggests that
risk managers regard insurance as a key part of the solution. But our
risk managers warn that this will only remain the case if the industry
invests more energy in understanding and developing solutions around
non-traditional, non-physical risks. We at ACE are already responding to
the challenge. By acting as true business partners and building
long-term, strategic relationships with risk managers we stand ready to
help them and their organisations manage effectively those emerging
risks.”
Risk managers that took part in the survey believe that the insurance
industry has a critical role to play in helping businesses manage this
new wave of emerging risks. More than four out of five respondents (82%)
say insurance plays an important role in their management of technology
risk, for example, while 80% of respondents expect insurance to be very
or fairly important in three years' time to help manage the top-three
emerging risks.
However, survey results indicate that the industry cannot be complacent.
Risk managers say they want better solutions for managing non-physical
risks. Almost half (45%) believe the industry could improve its offering
around technology risk. Risk managers also want to see the industry make
progress around people risk (28%) and supply chain risk (28%).
ACE’s Emerging Risk Barometer includes detailed information and
statistics on all these risk categories, information on how different
industry sectors view risk and extensive commentary on the management of
emerging risks. It can be downloaded at: www.acegroup.com/emergingrisk
ENDS
About ACE Group
ACE Group is one of the world’s largest multiline property and casualty
insurers. With operations in 54 countries, ACE provides commercial and
personal property and casualty insurance, personal accident and
supplemental health insurance, reinsurance and life insurance to a
diverse group of clients. ACE Limited, the parent company of the ACE
Group, is listed on the New York Stock Exchange (NYSE: ACE) and is a
component of the S&P 500 index.
ACE UK & Ireland’s five regions are:
· Ireland (Dublin and Belfast) · Scotland (Glasgow, Aberdeen) · The
North (Leeds, Manchester, Newcastle) · Midlands (Birmingham) · London
and South East (London, Maidstone, Reading, Watford)
Additional information can be found at: www.acegroup.com/uk
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Source: ACE Group