Beazley’s poll finds low resilience to war risk

Business leaders and insurance buyers said their firms have low resilience to war and terror risks when surveyed before Russia’s invasion of Ukraine, according to research by Beazley. The poll found war and terror was considered to be low risk in January but Beazley said the risk would have moved into high risk territory if asked today, following the outbreak of war in Ukraine. War risk was ranked as the top risk for 22% of UK and US business leaders and insurance buyers by summer 2022. Economic uncertainty, supply chain and pandemics were considered by business leaders to be high risk but they fear their companies are operating with low levels of resilience. Beazley said environmental damage and inflation risk were new to the high risk/low resilience quadrant in this year’s Risk and Resilience survey. Some 25% of business leaders surveyed said they were operating in a high-risk environment in January, but 43% of UK leaders and 38% of US leaders expected to be operating in a high-risk environment in six months’ time. Economic uncertainty dominated business thinking about risk before the invasion of Ukraine, Beazley said, after rising six percentage points since last year. It ranked as the top risk for 27% of business leaders at the turn of the year. Some 55% of global respondents said they are very or moderately concerned about mitigating inflation risk this year, with the numbers topping out for US respondents at 65%. Fears over employer risk, intellectual property and energy transition have doubled since 2021, Beazley said, but at the same time resilience hasn’t improved. “Concerningly, as risk perceptions overall have risen, so perceived resilience has fallen back dramatically,” Beazley said. It added that only 27% of respondents reported high levels of resilience for managing risk at the beginning of this year compared with 35% in 2021. However, businesses reported high levels of resilience to cyber risk, which ranks as high-level threat. “Cyber risk stands clear of every other as a top risk to business but one to which businesses feel particularly resilient,” Beazley said. Almost half of respondents have prioritised investment in cyber security and risk management. Beazley said UK business leaders were “notably less confident” in general than US business leaders. Adrian Cox, CEO of Beazley, said insurance buyers are facing a “perfect storm” in a high risk/low resilience environment. “Business leaders continue to face perhaps the stiffest test in a generation as the world reels from the economic whirlwind unleashed by Covid-19 to the unfolding horror and ensuing geopolitical dislocation caused by the Russian invasion of Ukraine,” said Cox. “Business resilience is under real threat as companies adjust to a new world order in which everything, from trading relationships, through commodity prices to supply chains, needs to be re-evaluated from the ground up. As insurers we must step up and help businesses work through this perfect storm of a high risk/low resilience world,” he said.

Beazley’s poll finds low resilience to war risk

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