Risk leaders say cybersecurity is business growth’s biggest threat

Given today’s frantic pace of technological and social upheaval, risk management certainly has never been more important to companies than it is now.

In fact, notes insurer Chubb in a new research report, many of the risks reported on regularly today “were either previously non-existent or have intensified greatly over the last 10 years.”

For example, in a Chubb commissioned survey of 500 business-risk decision-makers conducted by The Harris Poll, 40% of respondents identified cyber breaches/data leaks as a leading source of man-made disruptions resulting in unexpected, significant financial burdens in recent years.

The vast majority (89%) of survey respondents said their businesses are planning to increase or cyber insurance coverage or introduce new coverage. Additionally, 84% said they regularly rely on continuous monitoring of all cyber incidents as a critical risk management tool.

Cybersecurity threats also pose the greatest geopolitical risk, cited as a top threat by 60% of survey participants, outweighing concerns about political tensions, climate change and trade wars.

Next on the list of man-made disruptions was “changes in government policy/regulations,” cited by 25% of survey participants. Such changes can occur at any time, but in addition to cyber risks, many of those polled pointed at other current man-made disruptions that business-risk leaders didn’t face nearly as much 10 years ago.

These included social unrest posing reputational damage risk, often related to viral social media events; and environmental pollution/regulations, which has climbed the risk list in tandem with societal concern over climate change; and epidemics/pandemics.

Asked about technology risks that pose the greatest threat to growth, 56% cited data integrity/consistency, which was followed by digital transformation challenges (52%) and new technology adoption (49%).

When it came to financial risks, business-risk leaders most often pointed to concerns that have confronted them to varying degrees over many years, including cash-flow management (59%), inflation and/or interest rate risk (54%) and credit risk (50%). In the area of operational risk, 53% of those polled said supply chain disruptions are currently a top threat.

Additionally, the fairly recent specter of an increased incidence of natural perils has attracted business executives’ attention. Asked what perils have led to disruptive financial burdens, they were about equally likely to cite convective storms (24%), floods (23%), earthquakes (21%) and hurricanes (21%).

“Natural disasters and secondary perils can impact any company, regardless of size,” said Chubb senior vice president Derek Talbott. “And these events are occurring with increasing frequence and severity. Losses related to natural disasters have been substantial over the past decade.”

Meanwhile, the survey asked about respondents’ use of risk-mitigation tools and techniques. Among ten such tools listed, six of them were cited by at least 80% of participants as being either fully integrated or regularly used: monitoring cyber incidents/threats, employee training and education, incident reporting, risk assessments, qualitative analysis, and scenario planning.