Although the economic climate in the UK continues to show steady signs of progress, there are clear dangers for businesses that assume that the overall level of risk they face will necessarily follow a similar trajectory. Indeed, it is clear that the scope, focus and pace of further recovery will itself be shaped by the evolution of perceptions of risk within the business community – perceptions of strategic risk, market risk, operational risk and financial risk.
Many businesses have already recognised the need to place an increasing focus on their approach for managing the multitude of risks they face; as well as the benefits from so doing. However, it is apparent that there is still a significant level of opportunity for businesses to further improve their approach to managing risk. One particular area where an enhanced approach is likely to be beneficial is the ‘measurement’ of risk, which itself encompasses a broad spectrum of activities ranging from identifying what can be measured and how relevant data might best be captured and recorded, to using that information to identify specific actions to improve a company’s overall approach for managing risk.
In order to explore current areas of risk management focus, priorities for change and perceptions of the key issues and challenges still to be overcome, business insurance specialist, QBE, commissioned an independent programme of research among businesses in the UK. Interviews with 400 key ‘risk’ decision-makers from small, medium sized and larger businesses were conducted in the final quarter of 2013, and a second wave of interviews was completed in the second quarter of 2014.
The overriding conclusion from the latest survey is that businesses have taken on a range of ‘completely new’ risk exposures over the last few years. Our report confirms that many decision-makers acknowledge a need to strengthen, enhance and support their approach to managing risk – and that they recognise particular scope for improvement in the area of risk measurement. With the findings of the research in mind, this report highlights our thoughts on how businesses can best focus their investment in the risk management process.