Terrorism is no longer just one of the major concerns facing companies, but is a top cause of losses, according to the latest Risk Index from international insurance provider Clements Worldwide.
The threat of terrorism was the second biggest concern among companies surveyed in the last three editions of the report, but the latest risk index reveals that, for the first time, the threat has translated into actual losses – this time participants ranked terrorism as the second biggest loss-generating risk.
Legislative risks emerged in the rankings for the first time, coming in as participants’ third biggest loss driver, a sign that global instability may be taking its toll on business.
“We always asked about legislative risk, however it never featured in our top concerns. And this is the first time it’s become a top-level concern for a lot of our clients around the globe,” Smita Bhargava, VP of special programs & risks at Clements, told Insurance Business.
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Worry around the impact of changing legislation, as well as wider concern over political violence and instability, was fairly spread across all industries surveyed, Bhargava said.
“I think in the UK, for example, with Brexit and the election and everything coming up, the currency fluctuations that a lot of clients are seeing… that impacts business immediately,” she explained.
Since the company’s last Risk Index, there has been a staggering 90% growth in the number of respondents stating that they had suffered a political violence event in just the past 12 months, which Clements described as “just one of the indicators pointing to how political disruption, specifically political violence, terrorism and changes in legislation, are affecting businesses in 2017.”
But while issues relating to global instability were high on the list of concerns, cyber came as out both the top concern and the top loss-driver, with 25% of companies calling it their top concern.
The main takeaway from the report’s results is that people are starting to experience tangible losses as a result of these key concerns, Bhargava said.
“I think the industry as a whole in general – the clients as well as us – need to do a better job of preparation and prevention, rather than action post event,” she added.
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