Insurance Leaders & Risks

The World Economic Forum (WEF) just finished tabulating the results of its annual survey of business risks. More than 11,000 executives from North America and Canada shared their worries with the WEF in a survey conducted by Marsh McLennan and Zurich North America.

Reid Sawyer heads Marsh’s emerging risks group. He said the top worry in their minds is economic pressures and the strong possibility of another recession, or economic stagnation.

“What this is signaling to us is continued fragility in the system and concern over shocks that could occur,” Sawyer said.

With that, here are the results of the top-10 risks of doing business in North America:

1. Economic downturn — recession, stagnation

2. Infectious diseases — COVID, etc.

3. Labour and/or talent shortage

4. Inflation

5. Extreme weather events — floods, storms, and so on

6. Accidental or intentional use of biological, chemical, or nuclear weapons

7. Energy supply shortages

8. Misinformation and disinformation

9. Erosion of social cohesion and wellbeing

10. Household debt

Speaking, again, to the top issue of economic pressures, Sawyer said when you consider what’s happening politically and economically around the planet, that makes sense.

“Not surprisingly, the economic issues are dominant as we think about recession fears. There is a proverbial soft landing that we’re all looking for in the economy,” Sawyer added. “While we’ve had significant progress with jobs reports and the reason inflation report that came out this week, there’s still an overwhelming concern when we think about how events in the Middle East could spiral further and create other cascading issues.”

Jessica Balsam is with Zurich’s North America resilience solutions sustainability team. She addressed the concern over climate change and energy issues.

“From a resilience perspective, the issue is the uncertainty around the depth and breadth of climate-related issues,” she said. “Climate and energy issues are very closely related, and to see them both on the list is certainly something we’re paying attention to and preparing for.”

You also can’t leave a subject like business worries without addressing cyber. Sawyer was surprised that it’s not in the top-5 worries.

“Cyber’s absence in the top five is significant when considering where it sits in other surveys. The fact that AI risk and climate are not in the top five is [also] notable,” Sawyer said. “What the last five years have taught us, if anything, is that, with the turmoil we’re facing, we need to plan on multiple risk horizons. The challenge comes when we start aligning priorities and risk capital to deal with short-term risks but at the cost of the choices we’re making in the future.”

Source link: Insurance Business America — https://bit.ly/3GlwAaf

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