CNA Hardy, a UK specialist commercial re/insurer, has released the Spring 2018 edition of its Risk and Confidence Survey, which reveals that just 42% of executives in UK businesses are confident in the ability of their firm to grow and prosper.
This figure shows a cautious increase from the 28% that CNA Hardy reported in its Autumn 2017 survey, but is still well below the 70% confidence level recorded in Spring 2017.
Increasing investment in technology and ongoing economic and political stability are supporting the slight lift in confidence, particularly among larger businesses, although almost a third of UK business leaders remain cautious about their operating environments.
The report found that the top concerns for UK business leaders were cyber risks and regulatory risks, with half of respondents predicting that cyber risk would dominate their concerns by Autumn 2018.
Similarly, 23% of executives currently felt that regulatory risks were a top priority, rising to 32% in Autumn 2018 projections, due in large part to the uncertainties surrounding the impact of Brexit on UK business operations.
In addition to Brexit uncertainties, regulatory concerns were related to the introduction of the General Data Protection Regulation (GDPR) in May 2018, the Gender Pay Gap regulations, and the continued impacts of the 2015 Modern Slavery rules on supply chain management.
Dave Brosnan, Chief Executive Officer (CEO) of CNA Hardy, said: “UK business leaders’ sentiment is clear. While stability has brought something of a recovery of confidence, companies remain cautious, because they see serious issues on the horizon, including Brexit, the UK’s current slow economic growth, and the possibility of a global trade war.”
CNA Hardy found European business leaders to be far more optimistic than their UK counterparts, with 76% expressing confidence in the ability of their firm to grow and prosper.
Patrick Gage, Chief Underwriting Officer at CNA Hardy, commented: “Risk management has now become complex for many businesses, and also fast-moving. This has brought operational change. Many firms are devoting much resource to the twin dangers of cyber attack and data loss (and as a consequence to their own GDPR preparation).
“We also see evidence that firms are turning their operational and management resource towards the rising tide of regulatory risk. However, the lens is perhaps too tightly focused. While firms may be working on the specific operational patches to manage these challenges, they are not yet following through to see how it can affect and increase supply chain risk or their overall corporate risk.”
In contrast, ranking low among the concerns of UK business executives was corporate and supply chain risk, with only 10% of survey respondents prioritising these risks, which encompass fraud, corruption, poor governance and pensions exposure.
Brosnan explained that companies “are still not giving corporate and supply chain risk the attention they deserve. Only 8% of business leaders rate supply chain as their top risk today and businesses consistently fail to rate supply chain as a top concern.
“This is in spite of the fact that the triggers for supply chain disruption are growing ever more numerous and severe, and causes of supply chain failure can range from local weather to global politics.”