The Emerging and Interconnected Risks Survey explores the complex risk landscape we’re facing today, tomorrow, in the future and the connectivity of those risks.
This report shares new insights from 68 executives based in the United Kingdom from our global survey that asked those on the frontline of risk to share their most pressing concerns and the actions they’re taking to address them. This included respondents from 11 different industries across four countries in organisations responsible for an estimated 170,650 people and $213 billion in revenue. Half (50%) of these respondents were key C-suite decision makers for risk in global organisations
What are your peers concerned with? The headline answer is complex interconnected risk landscape, huge uncertainty and the need to align risk and strategy. Fewer than one in two organisations (47%) feel their business model and strategy are resilient to today’s emerging risk landscape. Those odds get worse looking at the strategic horizon in 10 years’ time. Only 12% feel any sense of confidence, leaving close to 9 in 10 of your peers concerned their approach to the complex emerging risk landscape will need to radically change.
Our UK respondents identified 187 emerging risks and 364 risk connections through a new risk taxonomy designed to help risk leaders take a second look at where change is happening. The survey reveals that change is happening everywhere, all the risks are connected and urgent gaps demand action.
With the London Stock Exchange FTSE100 responsible for more than $2 trillion of revenue, the financial impact of the wrong action – or worse, inaction – in the face of inter-related risks requires shared understanding and a unified strategy. No organisation is disconnected from the complex risk landscape, whether through international trade, ownership or end customers. Your vulnerability could be an undiscovered supplier or underappreciated risk connection.
51% see AI as one of their top emerging risks
57% see cyber risk as one of their top 5 drivers of emerging risks in the next two years
82% believe technology will remain a key source of emerging risks in the next 10 years
364 risk connections covering 43 of the 48 survey risks
Leaders must adopt a broader perspective and a new risk language. They face deep uncertainty about the future of their business model and strategy, evolving material technology risks, responding to climate transition while being surprised by increasingly extreme physical risks and growing concerns about the materiality of nature. At the same time, a new world of disorder is reshaping the rules of geo-economic systems, while closer to home the ‘cost-of-living crisis’ stretches consumer spending and stresses societal cohesion.
These risks are, in turn, deeply connected to each other, with events revealing new protection gaps that put capital at risk. Against this complexity, can thinking about risk in silos remain effective? A reset is needed.
Key findings
- 84% were unable to recall how their organisation define and prioritize emerging risks. If leadership isn’t clear about what matters and why, risk and strategy will remain misaligned.
- 7 in 10 don’t believe they have access to the insights needed to understand and action emerging risks. There are knowledge gaps holding leaders back. Leaders need specialised industry, role and risk knowledge.
- 9 in 10 don’t believe they have the data and models needed to understand and quantify the materiality, leaving leaders uncertain about where to allocate capital. Our global top performers (who self-identified their organisations as outperforming their peers against metrics like financial performance and employee retention) are exploring approaches like wargaming and testing their insurance limits using benchmarking.
- 7 in 10 don’t believe they have access to the insurance and risk transfer solutions that will secure their investments.
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