Friday, July 31, 2009
The economy is currently dominating the risk management agenda, according to a survey of 570 global business leaders by the Economist Intelligence Unit, commissioned by Lloydâ€™s. As a result, environmental and natural hazard risks are increasingly being seen as low priority. Among the top 10 global risk priorities identified in the survey, all of the risks are either directly or indirectly related to the economy. This raises the question of whether companies are sidelining other, vital risks in their efforts to navigate their businesses through the current economic downturn. Although respondents claim they are well prepared to manage environmental and natural hazard risks, their low priority suggests there may be gaps emerging in the ability of companies to withstand some longer term and tail risks. According to the survey, executives need to look beyond the headlines when assessing risk priorities and not focus entirely on short-term issues. â€œRisk management can too often focus on chasing the latest problem, rather than taking a more dispassionate view of risk over a longer time-frame that takes account of a broader set of potential threats, including tail risks,â€ the survey notes. Check out I.I.I. facts and stats on international insurance markets.