Transferring Risk Helps Relieve Leaders’ Biggest Fears
According to Aon’s 2022 Executive Risk Survey, which aggregates and examines responses to its annual international survey of C-suite leaders and senior executives in the U.S., the EU and the UK including 800 respondents at companies with at least 500 employees, 79% of global business leaders expect a recession in 2023. The business leaders highlight several key risks driving their pessimistic expectation including, the following: (A) supply chain disruptions, (B) geopolitical violence, and (C) extreme weather events that some leaders attribute to climate change.
Only one-third of the surveyed leaders reported being “very prepared” for a possible recession. But rather than focus on the potential for doom and gloom, we offer one avenue companies can explore to be better prepared to face those risks: sell them to someone else. Some companies perceive buying insurance purely as an expense, a drain on profits. However, sophisticated companies and their leadership enthusiastically identify the risks with the greatest potential to cause them financial damage and transfer those risks to insurers through a robust insurance portfolio tailored to best protect their business continuity.
The following are just a small handful of risks that the surveyed global leaders identified as being most troublesome, and potential insurance solutions that may be worth considering to transfer those risks.
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"Transferring Risk Helps Relieve Leaders’ Biggest Fears," by Jared Zola and John A. Gibbons was published in Chief Executive Magazine on March 21, 2023. Reprinted with permission.
