Business Continuity in the News

“Emerging Risks” Research – March, 2008

We are pleased to showcase highlights of a survey conducted by Business Continuity Expo 2008, on “Emerging Risks” and sponsored by Marsh, the world's leading insurance broker and risk adviser.  It supports our commitment to provide the UK market with a unique Insurance product that will significantly enhance the level of balance sheet protection.

According to the survey, 87 per cent of businesses see climate change as the single biggest threat in terms of risk assessment and the effect it could have on their businesses’ future growth – with many at a loss as to what can be done in order to prepare or plan for this eventuality.  This threat to the continuity and long-term success of their business is ahead of terrorism, pandemic ‘flu, flooding, the credit crunch, government red-tape, outsourcing and offshoring. The survey was conducted amongst 150 major UK and European companies.

Also of great concern to 83 per cent of businesses is the risk that traditional sources of energy will reduce and the cost of oil and gas will rise significantly over the next 5 years, and have an adverse on their operations.  Sixty per cent are not prepared for this eventuality and see it as a major threat.

Many survey respondents also have grave concerns over the shortcomings and risks of their own outsourcing and offshoring practices. Although these have been undertaken as a means of cutting costs, 65 per cent of businesses are worried that they have underestimated and poorly understood the risks associated with outsourcing and offshoring. 46 per cent admit that in some cases the risks outweigh the anticipated benefits and they are not prepared for interruptions or breaks in their outsourcing and offshoring practices.

It would appear that the underperformance or failure of suppliers now represents as big a threat to business as an internal failure or disruption.  61 per cent of companies are concerned about the failure of suppliers to perform, with a third admitting they are unprepared for this risk.

The crisis over subprime lending and the credit crunch is a hot topic at the moment and a number of financial services have found themselves in difficulty as a result. The survey found that 33 per cent of businesses believe they will be affected by subprime lending and the credit crunch. Forty four per cent of large companies in the financial sector consider this to be a threat yet only 25 per cent are prepared for this to hit them.

Sixty per cent of businesses believe there will be a terrorist attack on UK soil within the next 18 months with 73 per cent of these companies having planned for such an event. Seventy five per cent of large manufacturing companies who said they thought there would be a terrorist attack admitted they had not prepared or planned for such an incident.

Following the floods of 2007 and the recent storms, 74 per cent of businesses see adverse weather as a real threat of which 70 per cent are prepared. However, 40 per cent of small manufacturing firms and 50 per cent of large retails firms who see adverse weather as having a significant effect on British business admit to not having a plan in place.

Source: ContinuityCentral.com