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Brexit. The new ‘B’ word that no-one wants to say no matter which side of the Leave or Remain fence you sit on has reared its ugly head again - being responsible for yet another negative report, this time a survey by business insurance expert CNA Hardy.
The insurer’s most recent global risk confidence report has found that confidence levels of UK businesses were at only 36%, the lowest in the world.
By contrast, Asia-Pacific had the highest levels of confidence, at 65% over the survey period which was from May 2018 to May 2019.
Dave Brosnan, CEO of CNA Hardy, explained that while there were global trends, business confidence was one area where local variations did occur.
“Globally over half the business executives were confident about their ability to grow their business,” Brosnan said. “But there were substantial variations on a regional basis.
“In the Western economies confidence has fallen. This trend is most apparent in Europe where it’s gone from 70% confidence down to 50% confidence. The UK really brings up the bottom of the pack there, with about 36% confidence levels.”
And the main reason for this low confidence? Brosnan said the answer was pretty clear: the situation with Brexit. From the research CNA Hardy has done, this is having a flow on effect on what organisations are willing to invest in their businesses.
“As you would expect, one thing comes out loud and clear - there is and continues to be a lot of concern over Brexit,” he explained. “In the UK, Brexit remains an undone deal.
“Uncertainty continues to increase, confidence is low and few business leaders are really inclined to invest in their businesses today. And that is very borne out through the research. The prospect of a hard Brexit is really casting a shadow on businesses confidence levels.”
The issue doesn’t look like stopping until the Brexit issue is fixed, with 83% of business leaders seeing high levels of risk going forward. Brexit is also impacting confidence in Europe, with the delay to the UK exit from the EU causing business leaders’ confidence to drop, and their perception of risk to rise.
One issue that the report highlighted that wasn’t limited to the UK or to Brexit was that business risks are more global now, and less region specific. CNA Hardy found that there were common themes to what business leaders reported, no matter what country they were from.
VP head of property, marine and energy, Carl Day, explained that there were specifically three main risks that were reported as concerns to business leaders across the world.
“When it comes to risk, people look further afield and really most of the business risk is global now, as opposed to the confidence which is more local,” he said. “The three key things which people are nervous about stay the same, which is the economic risk, the cyber risk, the technology risk. The real change this time around is the perception of heightened reputation risk coming through.”
The rise in concern about reputation risk was particularly startling as fears have grown quickly, and it is a risk that many businesses seem unprepared for.
“There’s more and more things businesses can’t control, because they are global in nature,” Day explained, “which I think is then leading to the reputational challenge where people are feeling more vulnerable perhaps as business leaders to things outside of their control.
“The speed of the response, say by social media reporting things going wrong, has maybe just increased visibility among shareholders.”
