Cybersecurity is the greatest current and emerging risk among businesses across the globe, according to a new actuarial survey of risk managers.
The results represent a change in perception from the world’s leading risk professionals as hackings and other data breaches continue to dominate headlines. While financial volatility and economic risk still factor into much of business owners’ thinking, the survey betrays many important changes in the risk landscape that insurance producers should consider.
Overall, risk managers expressed cautious optimism in their global economic outlook for 2016, with 73% indicating a moderate outlook and 13% indicating a good outlook. Another 13% of risk managers had poor expectations for the year, which Max Rudolph – head researcher on the Society of Actuaries’ ninth annual “Survey of Emerging Risks” – says is in line with previous reports in the series.
As for risk managers’ greatest concerns, there is some difference between what they view as the greatest current and emerging risks.
“There is a stark difference between the volume of risk managers who view cybersecurity as the greatest current risk (15%) compared to those who view cyber threats as the greatest emerging risk (23%),” Rudolph said. “These differences may be due to the perception that these risks may have more volatility or strength in the future.”
Financial volatility and terrorism round out the top three most impactful current risks for the second year in a row, Rudolph added.
As to risk managers’ future outlook, the report found the five greatest emerging risks to commercial enterprises to be:
- Cybersecurity (65%)
- Financial volatility (45%)
- Terrorism (37%)
- Asset price collapse (31%)
- Regional instability (26%)
These results illuminate “notable change” in managers’ perceptions of impactful emerging risks since 2014, Rudolph noted.
Cybersecurity surged ahead from 58% of respondents labeling it as the greatest emerging risk in 2014 to 65% in the most recent survey, far outstripping economic concerns. Financial volatility increased just one percentage point over the past year, and an actual decline from the recent high of 59% in 2013.
Concern over terrorism was also down, from 41% in 2014 to 37% in 2015. Rudolph noted this is likely to change, however, as terrorism perception “tends to ebb and flow with recent events” and 2015 was a relatively inactive period as compared to 2016.
Chronic disease also declined following Ebola concerns, but may increase in next year’s survey with the Zika threats on the rise.
Further down on the list, concern over climate change rose from 19% to 26% and has the potential to increase in the future given recent severe weather episodes.
Geopolitical risks, meanwhile, fell to the lowest result since 2008.
Image Source: Society of Actuaries
A total of 248 risk managers participated in the online survey in November 2015.
Source: Insurance Business