Fear of terrorism doubles in latest global risk survey
FEAR OF TERRORISM DOUBLES IN NEW CLEMENTS WORLDWIDE GLOBAL RISK SURVEY
Political Unrest and Business Interruption Join List Causing over a Quarter of Organisations to Delay or Cancel Global Expansion
LONDON – January 19, 2016 – The number of global risk managers citing terrorism as their top concern has doubled over the past year, to 22 per cent, according to a new report released today by leading international insurance provider Clements Worldwide.
The jump reflects that managers within the multinational corporations and humanitarian aid organisations surveyed for the Clements Worldwide Risk Index see terrorism as a risk that needs to be increasingly contained in key areas of operations – not just war zones. Terrorism concerns, in addition to other concerns and losses, including political and labour unrest and business interruption and supply chain disruption, have led a significant 27 per cent of global organisations to delay or even cancel investment and expansion.
Cyber-attack, and the subsequent liability that follows, was ranked as the top concern by 27 per cent of respondents and the source of highest losses by 22 per cent - another category where attacks are becoming more common and unpredictable.
“The last decade has seen a dramatic increase in instability and even violence,” said Chris Beck, President of Clements Worldwide. “These risks impact individual safety, operational and investment planning and organisational liability. Ever increasing unpredictability is the new normal for which organisations need to be prepared.”
One in five managers (20 per cent) surveyed reported losses in the past five years due to terrorism and around a quarter (24 per cent) due to political and labour unrest. Political violence and risk, which includes civil disobedience, economic or election protests, and currency exchange volatility, plays an increased role in the ongoing and prospective operations of multinational corporations and global aid organisations. Associated losses, along with kidnappings and other risks, are impacting global investment and humanitarian aid activity.
The survey also highlighted the gap between perceived risk and actions to manage it, while pointing to the fact that some risk managers are becoming more focused on key risks. Even though surveyed managers perceive heightened risks associated with terrorism, only 16 per cent say they are as prepared as they could be to address them.
On the contrary, for political and labour unrest, the percentage of risk managers feeling “most prepared” increased from 12 per cent in the Summer 2015 Index to 20 per cent in the latest Index, highlighting that action can and needs to be taken to protect staff and assets. According to the Aid Worker Security Database, 2013 was the riskiest on record for aid workers, with record numbers of deaths and injuries. While those numbers were lower in 2015, they remain at elevated levels but may reflect that focused efforts on security and staff safety are paying off.
Similarly, costs associated with risks that are seeing aggressive review and preparation, such as medical costs for international staff, are decreasing proportionally. Medical-related expenses went from being ranked first in the Summer 2015 Risk Index at 30 per cent to fourth at 23 per cent in the most recent survey, while being ranked by risk managers as the items for which they feel most prepared.
“Business as usual is a thing of the past,” said Beck. “Concerns outlined in the Clements Worldwide Risk Indexunfortunately reflect the uncertain environment in which all organisations increasingly operate. The good news is this world of heightened risk can be mitigated with proper planning and appropriate investment in sound strategies and the right products.”
-ends-
Notes
About the Clements Worldwide Risk Index
The Clements Worldwide Risk Index is based on an online survey conducted from October 2015 to November 2015. Managers in 420 global organisations in the global humanitarian aid, oil and gas, logistics and other sectors participated in this second survey. For a copy of the Clements Worldwide Risk Index and more information about the methodology, visit www.clements.com/riskindex. (NB Link will go live to new report onTuesday January 19)
blog comments powered by Disqus
