ACE Emerging Risks Barometer 2015: Technology, Supply Chain & Regulatory Risks Top Concerns for Businesses across Europe, Mid...
07 July 2015 - 6:00PM
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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version on businesswire.com: http://www.businesswire.com/news/home/20150707005096/en/
Luther PendragonCharlie Evans0207 618
9100ace@luther.co.uk
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