In an article in Security Magazine this month which cited the 2015 Travelers Business Risk Index, 44 percent of executives think that business environments are becoming riskier and that businesses are ill prepared for such risks. I like these studies (as many of you know) because I think they provide good indicators on what’s happening in our world of risk.
Of all the business risks currently in play, medical costs and cyber-risk are seen as the primary risks they are least prepared to handle. The biggest overall concern was medical cost inflation at 33 percent with cyber risk a close second at 29 percent (compared to 2014 when cyber-risk ranked fifth). Other areas cited as major concerns in the survey included global conflicts and political instability. More than half of businesses noted extreme weather with growing anxiety.
Not surprisingly, we are seeing these risks have increasingly found their way into discussions with captives and risk retention groups. Unlike much risk that is covered under the traditional insurance industry, emerging risks continuously evolve – like a virus. And traditional insurance is like today’s antibiotics – less effective these days in treating the bugs! Because captives are as mutable as the risks they are meant to mitigate, they are truly the new medicine to fight today’s highly contagious risks!
I hope I will see some of you at the upcoming National Risk Retention Association in Chicago next week. Thanks and keep in touch!