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Lloyd's Report Suggests Businesses Worry About the Wrong Risks

According to a new report by Lloyd's of London, the world's leading specialist insurance market, business leaders feel comfortable managing internal risks, such as reputation...
August 4, 2009

According to a new report by Lloyd's of London, the world's leading specialist insurance market, business leaders feel comfortable managing internal risks, such as reputation and corporate liability, but are less confident about external risks, such as currency fluctuation and cancelled orders. The report reveals that there may be great disparity between what companies think threatens them and what their exposure to a particular risk actually may be.

"It is completely understandable that companies focus on the latest problem, but good risk management needs to take into account the broader risks and potential threats, and keep an eye on the horizon," said Lloyd's Chairman Lord Levine. "What will disrupt business tomorrow is just as important as what is faced today."

Levine said a report last year found that 55 percent of businesses feel that a US-style compensation culture is spreading around the world, and in a recession the speed at which customers or suppliers will escalate litigation must be considered." The latest report, Risk Priorities and Preparedness, produced in conjunction with the Economist Intelligence Unit, is one of the largest ever surveys on risks and how prepared insurance executives are - or think they are - to deal with them.

Companies Fear the Unknown (Lloyd's 7/29/09)