Threats as diverse as attacks by cyber-terrorists and uncertainty around renewable caused by national energy policies are among the emerging risks that could blindside business executives in 2012, according to Willis Group Holdings.
The insurance broker has used its WillisWire blog to detail the 'lesser known, potentially dangerous' risks that businesses should look out for in the midst of the current socio-economic and political upheaval.
In total, 18 industry-specific risks are identified by Willis, including:
- · Energy - fracking;
- · Environmental - fracking;
- · Mining - Contingent Business Interruption;
- · Supply chain interruption - issues at sub-tier suppliers;
- · Trade credit - political-economic turmoil;
- · Financial institutions - 'Bradley Manning 2.0';
- · Terrorism - cyber-terror;
- · Aerospace - space tourism;
- · Power and utilities - sodium sulphur batteries;
- · Health care - 'booming' physician employment;
- · Renewable energy - uncertainty caused by national energy policies;
- · Captives - transfer pricing;
- · Political risk - continued unrest in Egypt and Libya;
- · Analytics - overreliance on models;
- · Directors and Officers - international cooperation of regulators;
- · Engineering - 'hold harmless' legal contracts;
- · Life sciences - 'no fault' compensation for clinical trial patients;
- · Employee safety - obesity 'epidemic'.
Willis Group acknowledged that some of these risks were not 'front and centre' for companies, while others, such as risks associated with hydraulic 'fracking' for natural gas, were increasing in significance. Lawsuits in this area had made insurance hard to find, it noted.
In terms of political-economic turmoil, Andrew Van Den Born, Willis' executive director for its financial solutions division warned of the impact if Iran carries through its threat to close the Straits of Hormuz.
Closing 'one of the most strategically important choke points for traded seaborne oil' could trigger a supply chain meltdown in the oil and gas industry, he said.
Meanwhile, Willis' financial practice leader, Richard Magrann-Wells, predicted that 'Bradley Manning 2.0' - a 'bright programmer with an Ivy League education and an access card working at a technology, bank or credit card company' was a new threat that financial institutions should work to protect themselves against.