More than half of European companies feel underprepared to deal with the threat of terrorism and political violence, according to research published yesterday by Ace European Group.
The insurance company's survey of 500 firms across the continent found 54% did not feel ready for the emerging risk, despite 32% of firms identifying it as the most important risk concern for their business.
At the same time, only 46% of those surveyed have crisis management procedures in place to help manage their exposure to terrorism and political violence.
Over half (51%) of those questioned rely on their insurer or insurance broker for guidance and information on the risk, but only 7% of firms have fully comprehensive insurance cover in place for terrorism and political violence. More than one in three (34%) have none at all.
Piers Gregory, terrorism underwriting manager, ACE European Group said: 'It is notable that only 7% of European companies in our research have comprehensive cover for terrorism and political violence risk. A further one in five believes that these risks are covered under another policy, but our experience shows that this is often not the case.
'Insurers and brokers must work together to help European businesses understand the potential gaps that exist in their insurance cover and take informed decisions on insurance purchasing.'
Behind terrorism and political risk, businesses' most significant concerns were environmental risk - ranked as important by 30% - and multinational/export risk - 27%.
In total, over half of businesses said they felt somewhat or completely underprepared in four out of the six risk categories surveyed by Ace. These were: terrorism and political violence risk; directors' and officers' liability risk; IT and cyber risk; and business, travel risk.
Andrew Kendrick, chair of Ace European Group,said the research showed how important it was for companies to ensure there was board-level responsibility for risk awareness. The survey found that the chief executive or chief operating officer has formal responsibility for risk management at 50% of European companies. The countries with the highest levels of chief executive oversight were Germany, Spain and the UK.
'Taking formal responsibility at board level for driving a culture of emerging risk awareness throughout the organisation and putting in place crisis management plans to prepare for key scenarios are two of these,' Kendrick said.
