A new report from Beazley outlines how business leaders are fearing the consequences of war and inflation.
The report, Spotlight on Geopolitical Risks, shows that US and UK business leaders feel able to manage current geopolitical risks, even as concerns over war have risen in the last year. It also found that 55% of business leaders believe they lack the resilience to deal with inflation.
Roddy Barnett, head of political risks and trade credit at Beazley, said: “Against a challenging backdrop, business strategies are now at a point of inflection. Even those territories far removed from the theatre of war in Eastern Europe are feeling the impact of global sanctions and commodity shortages on risks across the board from supply chain to cyber to political risk and trade credit.”
He added: “Businesses need to know that as we face a moment of geopolitical change, which is fraught with unpredictability, they can protect overseas physical assets and their human capital both at home and abroad, by actively investing in a mixture of risk management and effective insurance cover.”
The report also found that the perception of risk between the UK and the US differs. In the US, wrote the authors, the biggest change in risk perception was around economic uncertainty, which saw an eight-point rise between 2021 and 2022. However, in the UK, war and terrorism dominated, up 7 percentage points on last year.
As these risks have grown, says Beazley, resilience in both territories has fallen, although the UK reported the largest drops.
It added: “The number of US firms concerned about political risk fell by nearly 7 percentage points, compared with only a 1-point change in the UK, perhaps reflecting the fact that the US is a market in itself, and is consequently less vulnerable to world events that impact other global markets. This is in direct contrast to the UK which, post Brexit, is still heavily dependent on foreign trade.”