Executives believe employer risk is biggest threat: Beazley report

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Nearly a quarter, 23%, of executives cite employer risk as the biggest threat of the year and 24% say they feel unprepared to deal with it, according to Beazley, a specialty insurer, which released its Risk & Resilience report: Spotlight on Boardroom Risk 2024. 

The report includes responses from 3,500 business leaders obtained during January 2024.

In North America employer risk and ESG regulation are the top concerns. Reputation, business interruption and supply chain instability are lesser concerns. 

Almost half of executives, 42%, believe they are operating in a high-risk environment, compared to 31% in 2023. But 81%, also reported feeling resilient to risk. 

Forty-six percent of respondents said their trust in the value of insurance has increased and 47% say their trust in insurers has grown.

Bethany Greenwood, global head of specialty risks at Beazley said in a statement: "While macroeconomic conditions appear to be stabilizing, D&O risks are still front of mind for global business leaders. In the event of a company filing for bankruptcy, D&O litigation can quickly follow for executives. Amid persistent inflation and the ongoing threat of recession, this has been a key threat in recent years.

"At the same time, businesses and their executives are feeling the heat, with D&O liability extending beyond the realms of financial performance, with litigation now being brought against executives following cyberattacks, supply chain disruption and employment-related issues. Failure to comply with ESG regulation has proven another key flashpoint for D&O risk. Our latest report highlights how the threat landscape has fragmented and become increasingly multi-faceted with executives left scrambling to protect themselves. Understanding the risks and enhancing resilience has never been more important."

Other findings to note:

• Twenty-four percent of respondents said they predict failure to comply with new ESG requirements will be the biggest threat in 2025. 
  
• Twenty percent of respondents ranked reputational damage and the risk of director's or corporate decisions damaging brand value and customer trust as top business risks.
  
• Twenty-six percent plan to review hiring policies and boost diversity and inclusion, down from 36% in 2023. 
  
• Twenty-three percent of businesses in the U.S. plan to explore insurance options for risk and crisis management in the next year.