Travelers surveyed more than 1,200 U.S. business decision makers to learn what risks they worry about most, and how prepared they feel to handle those risks. While most companies continue to worry about rising medical and benefit costs, legal liability, and attracting and retaining skilled labor, 2015 results find many are increasingly concerned about cyber risks as well as global conflict and political instability.
Cyber Risks Cyber risks ranked as the second biggest concern for all businesses, up from fifth last year. Businesses are most concerned about malicious and criminal attacks (55 percent), followed by human error (24 percent), and system glitches (21 percent).
Among the types of malicious attacks most worrisome to businesses:
– 57 percent of respondents worry most about having their computers or data systems infected with a virus;
– 51 percent worry someone could gain access to their banking accounts or financial control systems; and
– 50 percent worry about a security breach or someone hacking into their computer systems.
Medical Cost Inflation More respondents (60 percent) are worried about medical cost inflation than any of the other risks in the 2015 Travelers Business Risk Index. While many business decision makers are concerned with this issue, it was less of a concern compared with last year (60 percent in 2015 versus 67 percent in 2014). Additionally, 33 percent of respondents said that medical cost inflation is among the risks they are least prepared to manage.
Legal Liability Legal liability-related risks continue to be another significant source of concern for business decision makers, with 56 percent of respondents reporting that they worry about it.
– Professional mistakes, errors, and omissions are among the biggest concerns, worrying 42 percent of respondents.
– Employee lawsuits for discrimination, harassment, and wrongful termination concern 34 percent of respondents.
– 33 percent of respondents worry about both customer slips and falls and driving accidents caused by employees.
Global/Political Conflict One of the most significant increases in concerns among business leaders relates to global/political conflict. About one-third of those surveyed (32 percent) worry about global/political conflict, which is eight percentage points higher than in 2014. One-quarter of decision makers surveyed said political unrest is a larger concern today than it was five to 10 years ago, up four percentage points from 2014.
Weather More than half (52 percent) of the respondents believe severe weather has become more frequent, but only 38 percent believe that is the case for their area, and even fewer (32 percent) believe it has increased the likelihood of damage to their business. The Northeast is the only exception, with 51 percent believing severe weather is more frequent in their area. Only 41 percent of respondents have a business disaster recovery plan in place to help rebound after a disaster.
Risk Management Few respondents consider risk management a strategic priority. Decision makers at small businesses (11 percent) were least likely to name risk management as a strategic priority or an important management activity, compared with medium-sized (20 percent) and large (36 percent) companies.
For full results, including industry-specific information, please visit www.travelers.com/businessriskindex.
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