Economic and cyber risks, especially those associated with ransomware and data loss, are a matter of increasing concern to directors and officers, according to a new survey from WTW and global law firm Clyde & Co.
The survey identified key risks for directors in North America, Latin America, the UK, Europe, Asia and Australasia, gathering responses from 40 countries.
Economic risk was considered the biggest risk for businesses by 63% of directors, followed by cyber risk at 62%, according to the survey. Geopolitical risk rose to fourth place from sixth place last year.
Overall, the results of this year’s survey are consistent with those reflected in the 2022 survey, with cyber, data loss and data extortion continuing to be among the top concerns for directors, WTW said.
For the first time, the survey split economic risks into three perils: inflation, recession and the job market. Most global directors cited inflation as the biggest economic risk at 69%, closely followed by recession at 67%.
Other key findings included:
“With a volatile business environment resulting from the current geopolitical uncertainty, it is no surprise that geopolitical risk is rising on the list of directors’ concerns,” said Jeremy Wall, head of global financial and executive (FINEX) risks at WTW. “The advent of technology ensures that cyber will continue to be of major concern and we are certainly seeing more demand for cyber insurance as a result. We are delighted to launch this report as we know it is being sourced as a great resource to support directors and risk managers when refining their risk management strategies.”
“Cyber risks remain the primary concern for directors in the Australasia region, an unsurprising perspective that is no doubt driven by last year’s major data breaches including Optus, Medibank and MyDeal,” said Jill Stewart, Australasian head of FINEX at WTW.
“With companies and their leaders operating in an almost unprecedented climate of uncertainty, this year’s survey provides timely and valuable insights into the evolving risk landscape,” said James Cooper, head of insurance at Clyde & Co. “We asked directors about 28 risks, and overall, the results are very consistent with last year, with cyber risks ranking significantly above other risks. There have been developments, however, with notable new risks including systems and controls, sufficient cyber expertise at board level and employee crime and cyber crime as a subset of crime risks.”
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