Political and economic turmoil shape 2012 risks

Vicky Beckett 05/12/2011

Social unrest, political and economic turmoil are predicted as high risk areas for 2012.

Risk consultancy, Control Risks, has predicted that social unrest will intensify and political and economic instability will cause continuing scrutiny of businesses, tight regulation and heavy taxation.

However an Airmic casualty benchmarking survey has reported that economic and political uncertainty so far have had little impact on the global insurance market.

Airmic also reported that captives continue to be popular, with 62% of companies surveyed using them in casualty programmes.

Richard Fenning, Control Risks CEO, said risk managers need to grasp, ‘the intense scrutiny businesses face through social media and its game changing powers and the potential for cyber-security and online attacks.’

“The indisputable lesson from 2011 is that planning for a low profitability but high impact events must be part of any strategic forecast.

“Organisations must develop ever more robust strategies to assess and mitigate exposure to changing security, political, social operational and reputational risks.”

Risk managers have been told that social unrest and social media threats need greater monitoring and understanding of the evolving public sphere, and greater social accountability.

However, Airmic says that retentions liability limits and types of insurance program have remained very similar across 2010 and 2011.

Paul Hopkin, Airmic technical director, said: “It will be very interesting next year to see how the market has responded to these pressures.”

Russell Meagher, head of major accounts at Chartis, said: “Very little has changed in the responses of risk managers from last year despite the many significant events of the year.”

“It would suggest that, for some, reacting to economic and legislative changes take longer than expected – in some cases because of the complexity of the changes, and of cost constraints particularly in the current climate.”

Bulgaria, Columbia, Libya, Mozambique and Sri Lanka are tipped by Control Risks to be the five states to watch for their growing economies and relatively low risk.

Europe’s debt crisis makes it increasingly high risk and Africa is tipped to be a booming market.

Senegal, Burkina Faso and Cameroon are seen as medium-risk countries in terms of instability.

Tags: Control risk, Debt crisis, Economic, Risk, Social unrest

Captive Live USA

News

Political and economic turmoil shape 2012 risks

Post a comment

Mary 22/02/2012 11:23am

Data Centre

Company and Ratings Search

Cell Company Guide

Essential Reading for risk managers