According to Beazley’s Spotlight on Business Risks report, 22% of global executives reported employer risk as the top business risk challenge they face in 2023—a notable share that has doubled in just two years.
Meanwhile, 27% of surveyed leaders said they feel ill-equipped and unprepared to deal with such risks, according to the Business Risks installment of Beazley’s Risk and Resilience research.
Beazley defined employer risk as “failure to support staff, including mental health concerns, or facilitating safe operating conditions post pandemic.” One fifth of the 2,000 surveyed business leaders predicted that it will remain their No. 1 business risk in 2024.
“Global business leaders are dealing with a challenging array of new and persistent risks that threaten their business models,” said Bethany Greenwood, group head of specialty risks at Beazley. “It might seem counterintuitive that executives are increasingly looking inward at their workforce and workplace to meet today’s challenges. However, the last few years have shown us the importance of executive decision-making that drives positive change in the workforce and supports colleagues.”
Twenty-two percent of the global business leaders surveyed by Beazley ranked ESG as the No. 1 business risk they face in 2023, marking a 3% increase from 2022. Sixty-one percent of executives ranked ESG risk in their top three most concerning business risks, with only employer risk receiving a higher percentage of votes at 63%.
“Increasing cross-border variation means that there is no one size fits all approach to dealing with ESG regulation, as there is no overarching world legislation or international law for businesses to fall back on,” said Moussa Thiam, head of cross-border general management at Beazley. “This has a significant impact on multinational businesses and can be seen as a barrier to international expansion by small and medium-sized businesses.”
The study also found that 28% of leaders feel unprepared to deal with reputational threats; approximately one in five said this was the biggest risk they face right now. Business leaders surveyed reported that managing their reputations will become increasingly tough in the coming months, with 17% ranking this as their top risk today and 19% predicting it will be their top risk in 2024.
According to Beazley’s findings, more than a third of global executives plan to explore insurance options that include risk and crisis management. The company’s data shows that 42% of global business leaders believe they will be operating in a high-risk environment in six months’ time, up from 31% earlier this year.
Earlier this month, the World Economic Forum shared that its 2023 Executive Opinion Survey found that economic and societal threats—such as an economic downturn, inflation, and an erosion of social cohesion—rank among the biggest risks to doing business in G20 countries over the next two years.
About the Risk and Resilience Research
During January and February 2023, Beazley commissioned research company Opinion Matters to survey the opinions of over 2,000 business leaders and insurance buyers of businesses in a variety of industry sectors based in the UK, U.S., Canada and Singapore with international operations. Survey participants were asked about their views on insurers and insurance, as well as on four categories of risk:
- Business, including supply chain instability, business interruption, boardroom risk, crime, reputational and employer risk and failure to comply with ESG regulations and reporting requirements.
- Cyber & Technology, including the threat of disruption, failure to keep pace with changing technology, cyber risk and IP risk.
- Environmental, including climate change and associated catastrophic risks, environmental damage, greenhouse gas emission, pandemic, food insecurity and energy transition risk.
- Geopolitical , including strikes and civil disruption, changes in legislation and regulation, economic uncertainty, inflation and war & terror.
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