Public health, regulation, BI top business risks

COVID-19, changes in legislation and regulation, and business and supply chain interruption dominate the thoughts of British businesses, with climate change shunted down the list of priorities as firms concentrate on what’s in front of them.

This is among the findings of a report published today by Aviva and based on a YouGov survey of 1,260 business leaders.

Charting the top concerns for British employers, the insurer’s first annual Risk Insights Report, ranked the top 10 risks facing businesses as:

1. Public health events – 46%
2. Changes in legislation and regulation – 35%
3. Business and supply chain interruption – 32%
4. Loss of reputation and brand value – 29%
5. Cyber security and cyber incidents – 27%
6. Macroeconomic developments – 26%
7. The health and mental wellbeing of employees – 19%
8. Shortage of skilled workforce – 17%
9. Market developments – 16%
10. New and changing technology – 16%

While 89% of businesses believe they are resilient to business risks, less than half (47%) of all businesses said they regularly undertake health and safety risk assessments, fire risk assessments (33%) or business continuity planning (28%). This is especially concerning, given that some assessments are required by law (eg. health and safety, fire). Small businesses in particular are struggling to prepare: 42% of small businesses said they have not carried out any of the main risk management activities in the past 12 months.

On Brexit, businesses say they face a wide range of risks during a potentially bumpy period as the UK seeks to develop new trading relationships outside the EU. For example, supply chains that previously relied on the free movement of goods and services across the EU have had to be reviewed and revised. Aviva’s research founds that three in ten businesses said they were actively looking to source from local or British suppliers to help ensure greater transparency and control, especially as consumer attention on a business’ supply chain has heightened.

Nick Major, interim managing director, Commercial Insurance, Aviva, said British businesses have shown extraordinary agility and determination in the past year, but there are more challenges ahead.

“The pandemic has underscored how increasingly interconnected and complex the risk landscape is; the importance of a strategic, proactive programme of risk management and prevention has never been clearer.

“Looking ahead, the challenge for businesses will be to juggle a multitude of pressing risk management priorities: managing the uncertainty of operating in a current pandemic, knock-on risks such as supply chain disruption, emerging risks such as cyber, while not forgetting fire and flood, and the evolving threat of climate change, which in the long-term pose some of the most disastrous risks to business. The ability to manage the immediate threat, but retain an eye on the evolving and longer-term risks is going to be critical for business.

“The explosion of homeworking and the move online through successive lockdowns has created an opportunity for cyber criminals; as our dependency on technology grows, so too must our emphasis on the prevention and protection from the increasing threat of cyber attacks. Cyber is now one of the biggest risks businesses face.

“British businesses are strong and resilient, and will emerge from the challenges of the current pandemic and Brexit. But evolving risks such as cyber and climate change remain the most significant long-term threats, not just for business, but for society. Failure to address the climate emergency now jeopardises our collective future, and UK businesses have a responsibility to act today to ensure a better tomorrow.”

Fieldwork for this report was conducted between 3rd and 24th September 2020 and included views of 1,260 UK senior business leaders from 648 small, 312 mid-market and 300 corporate companies (as defined by their annual revenue), from professional and business services, manufacturing and industry, construction and real estate, arts, entertainment and leisure, technology and electronic, retail and wholesale, motor trade, charities and the public sector.

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