Cybersecurity Threats Lead Business Risk Concerns

Cybersecurity, financial, and technology risks are the top threats to achieving sustainable growth for businesses, according to a survey of business leader by Chubb.

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Chubb’s “Risk Decisions 360°” report, based on a Harris Poll survey of U.S. and Canadian business executives, sheds light on these challenges. The research identified cybersecurity as the top concern for executives, highlighting the complex threat landscape organizations must navigate to ensure long-term success.

“While our report finds that cyber, technology and financial are the top three risks executives cite as posing the greatest risks to growth, executives also report that these are the three areas of risk that insurance is most effective at mitigating. Insurance alone isn’t a risk mitigation cure-all, but it certainly plays an important role,” said Christopher Maleno, senior vice president of Chubb Group.

Cybersecurity Threats

Cybersecurity has risen to the forefront of risk management priorities, with an overwhelming majority of companies identifying it as their top threat, Chubb found. Large enterprises are particularly wary, with 74% ranking cyber attacks as their primary concern, followed closely by 68% of middle-market companies and 66% of small businesses.

The impact of these digital threats is far-reaching, with 40% of executives citing cyber breaches and data leaks as the leading man-made disruptions causing unexpected and significant financial burdens in recent years.

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Cyber threats have emerged as the top geopolitical concern, with 60% of executives ranking them as the most significant risk. This concern outweighed other geopolitical issues such as escalating tensions between major powers (40%), resource scarcity and climate change (37%), and trade wars and protectionism (38%).

Technology Risks

As businesses increasingly rely on digital transformation to stay competitive, they face a new set of challenges in adopting modern technology, according to Chubb. For those who identified technology risk as their greatest threat, data integrity (56%) and digital transformation challenges (52%) topped the list of concerns. The risks associated with technology adoption (49%) also weigh heavily on executives’ minds, highlighting the delicate balance between embracing innovation and managing its inherent risks.

Financial Risks

Financial volatility remains a significant threat to business growth, the survey found. Cash-flow management emerged as the primary financial risk, cited by 59% of respondents. This concern is closely followed by inflation and interest rate risks (54%), and credit risk (50%). These financial challenges underscore the need for robust financial planning and risk mitigation strategies.

Other Significant Risks

Beyond the top three risk categories, businesses are grappling with operational risks, particularly supply chain disruptions, which 53% of executives identified as a major concern. Economic instability and slowdown also loom large, with 33% of respondents citing these as significant threats to their growth prospects.

As companies navigate this complex risk landscape, they are turning to a variety of tools and techniques to manage these challenges. From employee education and training to leveraging artificial intelligence in risk management, organizations are adopting multifaceted approaches to safeguard their growth and ensure long-term sustainability in an increasingly uncertain business environment.

Risk Mitigation Strategies and Challenges

In the face of evolving threats, businesses are employing a variety of strategies to mitigate risks and protect their growth, according to the report.

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The most commonly integrated and regularly used risk management techniques include monitoring cyber incidents and events, with 84% of companies employing this strategy. Close behind are employee education and training, incident reporting, risk assessments, and qualitative analysis, each utilized by 82% of organizations.

Insurance continues to play a crucial role in risk mitigation efforts. Currently, 53% of businesses have business interruption coverage in place to protect against events such as cyber attacks, natural disasters, or supply chain disruptions. Moreover, 33% of companies plan to add this coverage in the next 12 months, indicating a growing recognition of its importance.

According to respondents, insurance proves most effective in mitigating cyber security threats (48%), financial risks (44%), and technology risks (41%), which are coincidentally the top risk concerns identified by the survey.

Artificial Intelligence (AI) is rapidly becoming a game-changer in risk management. An overwhelming 93% of companies are currently using AI to some extent in their risk management processes. Of these, 24% report extensive use of AI, while 55% cite moderate use in areas such as risk assessment and mitigation.

Despite these efforts, confidence in risk mitigation capabilities varies significantly across business sizes. Overall, 64% of respondents feel their companies are effective at mitigating risks across their enterprises, while 36% don’t think their company is effective at mitigating risk.

However, a notable disparity exists between large and middle-market companies compared to small businesses. While 66% of middle-market and 68% of large company executives express confidence in their risk mitigation abilities, only 51% of small business executives share this sentiment.

View the full Chubb report here. &