Covid fallout raises a host of new risks for business

Risks related to Covid-19 and the economic havoc it wreaked across the globe are keeping corporate executives up at night.

That’s the takeaway from an Aon survey of 2,344 risk managers, chief risk officers and chief financial officers conducted in the second quarter. Cyberattacks were the most-cited hazard, and more than half of the top 10 risks that executives say they face today are tied to the pandemic, according to survey results released on Tuesday.

Many concerns are “innately interconnected, and they’re long-tail risks that are not single events”, said Lambros Lambrou, CEO for commercial risk solutions at Aon. “One of the things Covid-19 demonstrated is that long-term risks are no longer a long way out on the horizon. They’re actually on many businesses’ doorsteps.”

Among the Covid-related concerns cited by respondents were cyberattacks; business interruption; an economic slowdown; commodities prices and materials scarcity; pandemic risks and health crises; and supply-chain or distribution failure. Cyber-risk has deepened during Covid, Aon found, as more people work remotely, “presenting more potential security vulnerabilities”.

The insurance broker also identified issues that businesses appear to be taking too lightly. Among them are environmental, social and governance; climate change; personal liability linked to directors and officers; and disruptive technologies.

One caveat is that the risks companies face are evolving quickly and are diverse, demanding that the insurance industry change to fight them off, Lambrou said.

“Emerging risk and future risk is moving faster than the insurance industry is able to keep up with right now,” he said. “As an industry, we need to come together and innovate more effectively.”

Bloomberg News. More stories like this are available on bloomberg.com