Beazley undertook its annual survey of business leaders’ attitudes toward risk and resilience in January, before the Ukraine war. At that point, only 25% of those surveyed felt they were operating in a high-risk environment. However, when asked to project forward six months, 43% of UK leaders and 38% of US leaders anticipated they would be operating in a high-risk world by the middle of the year.
Geopolitical risk has become a much more pressing concern for businesses since the last survey, with war risk ranking top for 22% of UK and US leaders by summer, Beazley found. Economic uncertainty, which was a top concern even before the Ukraine invasion, has spiked six percentage points over the same time last year, with 27% of business leaders ranking it their top risk in January, rising to 28% in six months’ time.
55% of respondents globally said they were very or moderately concerned about their ability to mitigate inflation during 2022. In the US, that proportion rises to 65% – the highest of any country surveyed.
Other fast-rising risks in January included employer risk, intellectual property risk and energy transaction risk, all of which broadly doubled on 2021 levels, Beazley said.
Even as risk perceptions have spiked, perceived resilience has fallen dramatically, Beazley said. Only 27% of survey respondents said they felt highly resilient about managing risk in January, compared to 35% during the same period last year.
Like last year, US business leaders were more confident about resilience than their UK peers.
Emerging threats from the changing nature of work post-pandemic are helping to drive the fall in perceived employer resilience and spurring concerns over disruption due to factors such as changing customer behavior or market shifts, Beazley said.
“Business leaders continue to face perhaps the stiffest test in a generation as the world reels from the economic whirlwind unleashed by COVID-19 to the unfolding horror and ensuing geopolitical dislocation caused by the Russian invasion of Ukraine,” said Adrian Cox, CEO of Beazley. “Business resilience is under threat as companies adjust to a new world order in which everything, from trading relationships through commodity prices to supply chains, needs to be reevaluated from the ground up. As insurers, we must step up and help businesses work through this perfect storm of a high-risk, low-resilience world.”
