Few business leaders across the UK and US feel able to manage current geopolitical risks well, with concerns around inflation and the possible consequences of war up significantly since last year.
That is according to new research from insurance firm Beazley, which found that events this year have altered perceptions around the risks they face and their resilience to those risks, which has fallen dramatically since 2021.
After surveying 1,000 business leaders, the researchers found that inflation is causing deep concerns about domestic stability alongside the fear that global tensions are increasing the threat from external forces.
Specifically, 55% believe that they lack the necessary resilience to deal with inflation, which rises to 65% in the US. The proportion of business leaders ranking war and terror as their top risk is up 46% on the previous year, while economic uncertainty is up 31%.
As organisations struggle to adjust to this new reality, Beazley said that preparedness and mitigation strategies are becoming a key focus.
Roddy Barnett, head of political risks and trade credit, commented: “Against a challenging backdrop, business strategies are now at a point of inflection.
“Even those territories far removed from the war in Eastern Europe are feeling the impact of global sanctions and commodity shortages on risks across the board from supply chain to cyber to political risk and trade credit.”
The research highlights how rising prices and an unpredictable economic environment are driving instability and civil unrest, as already seen in Sri Lanka, with countries such as Egypt and Turkey possibly vulnerable too.
For US businesses, Beazley said that they must confront the double threat of unpredictability at home from rising gun violence, whilst as a world superpower, face up to a watershed in geopolitics as its relationship with Russia and China shifts.
The firm explained how specialist political risk, trade credit and terrorism insurers have a role to play in providing appropriate cover that provides the risk mitigation that businesses need, both in the UK and US.
Barnett added: “Businesses need to know that as we face a moment of geopolitical change, which is fraught with unpredictability, they can protect overseas physical assets and their human capital both at home and abroad, by actively investing in a mixture of risk management and effective insurance cover.”
Image credit: iStock
Author: Chris Seekings