The past two years have served as a stark reminder that risk does not exist in a silo. Since March 2020, the COVID-19 pandemic has had a drastic, enterprise-wide impact on businesses worldwide, from hindering supply chains and altering the corporate travel landscape to introducing new employee health and safety concerns.
The reality is that business perils have the potential to cascade throughout an organization. Risk management executives, chief finance officers, treasurers, and general counsels must not wait to address them.
Chubb surveyed 500 risk management executives in the U.S. and Canada in 2021, asking about their top concerns in the coming one to three years and their readiness to respond. Following are some key takeaways, published in Chubb’s 2022 Study of Future Risks and Readiness: Thinking About Tomorrow.
The pandemic topped the list of risk management executives’ five foremost concerns for the next one to three years, closely followed by environmental, social and governance (ESG) pressures and network disruption and/or cyber attacks. This is likely due to the wide-ranging nature of these threats.
Executives see the pandemic not as a single peril, but as a collection of business risks triggered or amplified by COVID-19. In alignment with this mindset, 61% of executives surveyed viewed pandemic risk as having a potential broad effect on their organizations.
Likewise, ESG pressures constitute a combination of many – and often interrelated – threats. Fittingly, nearly half (45%) of executives polled saw ESG pressures as having the potential to impact organizations on a widespread scale. Executives also viewed cyber threats through this lens, with 56% suggesting network disruption and/or cyber attacks as having the potential for broad impact.
According to Chubb’s survey, while a majority of executives were at least somewhat prepared for their top future risks, far fewer considered their companies very or extremely prepared. As executives look to close the gap, it’s critical that they reassess protection holistically. Many are making progress on this front, with three-quarters of executives reporting that they have already added, or are planning to add, technology to mitigate their top five risks, and more than half are already deploying or planning to deploy new policies and training, risk engineering, or physical safeguards and increased insurance coverage.
The interconnectedness and complexity of business threats cannot be overstated, but risk managers are not alone. Together with their insurance broker and carrier, risk managers can take a holistic approach to risk mitigation that includes risk engineering, clear insights on the changing risk and regulatory landscapes, and comprehensive insurance programs with appropriate policies and limits, to help stay ahead of – and better prepared for – what’s to come.
To learn more, download Chubb’s Thinking About Tomorrow report.
Matthew Merna is Senior Vice President, Chubb Group, and Division President, North America Major Accounts.
The opinions and positions expressed are the authors’ own and not those of Chubb. The information and/ or data provided herein is for informational purposes only and is not a substitute for professional advice. Insurance coverage is subject to the language of the policies as issued.