WTW survey finds 69% of large hospitality firms unhappy with insurance cover

Some 69% of risk managers and CEOs from leisure and hospitality sectors worldwide say they don’t have access to the right insurance and risk transfer solutions, according to a survey by WTW.

More than half said their insurance does not cover business interruption and other non-damage property losses.

The poll of 600 CEOs and risk managers working at companies with more than $300m in revenue also reveals that 44% experienced higher or much higher risk-related losses than expected over the past two years.

“Managers are keenly focused on risk but they are unsatisfied with the insurance coverage available,” WTW says in its Global Leisure and Hospitality Risk Outlook 2023. “Half (52%) say their insurance covers damage to property only, but not the cost of business interruption if they are forced to close.”

Only a quarter (28%) of businesses surveyed said the root causes of the risks they face are within their control. Three-quarters of respondents said they lack the data or knowledge to address risk, and 56% said they lack the right risk management tools.

The survey reveals that 59% of respondents measure and monitor their reputation. Some 46% said reputational risk insurance is necessary, while 22% said it is mission critical.

Survey respondents ranked supply chain as the joint leading threat to their business over the next three to five years, alongside property risks, digital transformation risks and cost and availability of inputs. Cyber risks and directors and officers liability risks also appeared in the top ten.

WTW said leisure and hospitality businesses are still impacted by the Covid-19 pandemic. About half of the firms surveyed said they are still some distance from business as usual. The survey found 47% reported a skills gap following an exodus from the sector and 46% are feeling the pinch from a shift to home-based leisure activities.

“Companies in the leisure and hospitality sector are still feeling the effects of successive global shocks and changing consumer behaviours,” Gaughan said.