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Cyber Attacks and Financial Risks Ranked as Biggest Worries for Mid-Sized Companies, According to Latest Report from QBE
News provided byQBE North America
Sep 19, 2023, 9:37 AM ET
NEW YORK, Sept. 19, 2023 /PRNewswire/ -- QBE North America today announced the release of its 2023 Mid-Sized Company Risk Report, shedding light on the dynamic landscape of mid-sized businesses in the United States. The report, now in its fourth edition, presents a comprehensive analysis of 12 macro and 99 micro risks as well as preparedness strategies among mid-sized companies with revenues ranging from $200 million to $3 billion.
Although this year's report shows an overall decrease in concern regarding risks compared to last year, challenges related to financial, digital and organizational risks remain persistent as the most pressing macro and micro concerns. Specifically, financial risk related to fraud, operational performance and liquidity; digital risk, encompassing cyberattacks, extended system outages and corporate espionage; and organizational risk, driven by challenges in attracting and retaining talent, demographic shifts in the talent pool and internal bias are top concerns for mid‑sized business leaders. These key areas of concern reflect the complex landscape mid‑sized companies navigate, yet the percentage of companies with a risk mitigation plan for each macro risk decreased to 43%, indicating a decline from previous years (46% in 2022, 45% in 2021 and 2020).
"The report's findings show a clear contrast, with some mid-sized companies making strides in addressing their highest concerns, while the broader preparedness landscape still offers substantial room for growth," said Lucas Prahl, Head of Middle Market at QBE North America. "This necessitates a call to action, urging the development of more comprehensive and tailored risk management strategies. These strategies should address most concerns, empowering mid‑sized businesses to navigate challenges with resilience and strategic foresight."
Demonstrating a shift from a sole focus on cost considerations, the report reveals that companies are expressing a desire for personalized risk management solutions, with more than half expressing interest in industry-customized advice and nearly half seeking insurance products tailored to their unique business needs. The report further underscores this trend by indicating that while interest in loss control specialists slightly decreased from the previous year, it remains significantly higher than pre-pandemic levels, suggesting an enduring recognition of insurers' expertise in risk management.
Additional 2023 Key Findings:
- Financial and digital risks have maintained their position as the most concerning macro risks for four consecutive years. Organizational and macroeconomic risks rose in the rankings, while pandemic-related and liability risks saw significant declines.
- Cyberattacks persist as the most concerning micro risk, consistently upholding their position as a significant concern within the digital risk category. Other micro risks included fragile supply chain, recession, inflation, attracting/retaining talent, fraud, operational performance and breach of privacy.
- Organizational risk overtook business interruption as the third-most concerning, primarily fueled by challenges in talent attraction and retention, as well as demographic shifts in the talent pool.
- Reputational risk rose, driven by concerns about product quality, customer service and employee conduct, while poor ESG ratings became less concerning.
- Macroeconomic risk rose due to concerns about recession and inflation, reflecting broader economic trends.
"This report is a testament to the intricate landscape within which mid-sized businesses operate, illustrating the challenges they face and the strategies they employ to navigate uncertainties," said Mike Foley, President, Commercial Insurance at QBE North America. "We recognize the significance of this report in guiding mid-sized companies towards more tailored risk management solutions. It underscores the need for dynamic strategies that address both macro and micro risks, enabling these companies to thrive in an evolving business environment."
The survey was conducted by the independent market research firm HawkPartners, engaging 384 executives, each responsible for managing and influencing business risk. These respondents held titles of director or higher. The survey drew from an online panel and featured targeted screening criteria to ensure a diverse cross-section of industries and company profiles.
Mid-sized companies play a crucial role in driving the U.S. economy, contributing significantly to economic activity and employment. Despite facing a spectrum of challenges including supply chain disruptions, labor shortages, inflation and interest rate hikes, mid-sized companies have demonstrated resilience, maintaining positive revenue and earnings growth rates.
QBE North America is a global insurance leader helping customers solve unique risks, so they can stay focused on their future. Part of QBE Insurance Group Limited, QBE North America reported Gross Written Premiums in the first half of 2023 of $5 billion. QBE Insurance Group's results can be found at qbe.com. Headquartered in Sydney, Australia, QBE operates out of 27 countries around the globe, with a presence in every key insurance market. The North America division, headquartered in New York, conducts business primarily through its insurance company subsidiaries. The actual terms and conditions of any insurance coverage are subject to the language of the policies as issued. Additional information can be found at qbe.com/us or follow QBE North America on LinkedIn and Facebook.
HawkPartners works with leading global brands to meet their toughest marketing challenges, delivering research insights beyond the obvious and developing actionable brand and marketing strategies. The firm helps market leaders make fact-based, high-impact decisions to position brands for growth every day. Headquartered in Boston, the firm has offices in Chicago, New York, Philadelphia, San Francisco and Washington, DC.
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