Financial, digital, business interruption and pandemic concerns top the list of macro risks for mid-sized company leaders.
The second edition of QBE Insurance’s mid-sized company risk report discusses the macro and micro risks that most concern mid-sized company executives, whether companies have risk management plans in place to address each of these risks, and their top needs for reducing their risk exposure. According to the report concerns about risks related to climate change have increased significantly in 2022 as compared to 2020 but it still ranks as the least concerning risk according to a new report.
When analyzing the specific risks, or micro risks, within the macro concerns, employee-related issues emerge as a common theme. Six of the top 10 micro risks identified by business leaders involve employees: fraud/theft, cybersecurity concerns related to working from home, attracting and retaining talent, accidents and health issues, organization performance, and internal bias/lack of a diversity framework.
The report found that COVID is still very much on business leaders’ minds as a top risk, but even after spending 18 months in a global pandemic, fewer than half (46%) of companies surveyed have a mitigation strategy for pandemic-associated risks.
Concern about climate change have grown significantly as a macro concern since 2020. The research showed that concern about behavioral change and pressure from eco-friendly stakeholders has increased significantly. However, climate change is at the bottom of list of concerns and is also the least likely to have a mitigation strategy.
Two-thirds of mid-sized businesses have unmet needs related to reducing risk exposure, with digital assets protection/coverage (17%) topping the list and risk management expertise provided by industry (15%) coming in a close second, both up significantly from 2020.
There was a general rise overall in business interruption concerns in 2021, with fragile supply chain risks and facility shutdowns identified as the top micro risks within this category.
Regulatory/legislative risk made the biggest jump of any macro risk, going from eighth in 2020 to sixth in 2021. Changes in regulations topped the list of regulatory/legislative risk micro concerns this year (40%), vaulting to the second highest micro risk overall.