Information technology, complex supply chains among risk concerns for European businesses

Globalization, increasingly complex supply chains and the rise of social media on the Internet are among the risks identified in a survey of European business managers in a recent report by Commercial Risk Europe magazine of London.
 
The Risk Frontiers Survey 2012 report was based in part on panel and individual discussions with 75 risk managers in 11 countries. It cited “the rise of social media and rapid and uncontrolled communications” as a group of “longer term strategic risks.”
 
The problem is not information technology itself, but rather “the speed of change and the uncertainty it generates,” according to the report, sponsored by XL Group plc and Willis Ltd.
 
“The conclusion from this year’s survey seems to be that the pace of change in technology means that companies have far less control over their processes, relationships with customers and staff than ever before and that is even before threats such as cyber-crime are considered,” the report states. “Even basic stuff like where valuable data should be held and how business interruption can be prevented and managed is becoming very complex and challenging.”
 
In the executive overview, Commercial Risk Europe notes that many participants in this year’s survey say “it is not easy for insurers to come up with broad-based and cost- effective solutions for their changing risk profiles overnight.” There is also concern among respondents that “brokers and insurers do not have a deep enough pool of talent to tacked difficult areas that do not rely on good old physical damage to trigger the policy.”
 
Supply chains were also a concern cited by respondents.
 
“Technology makes it possible to seek new markets and resources that build supply chains that look as if they will work perfectly when viewed in real time on the monitor in a neat matrix back at headquarters,” the report states. “But when the wind blows too hard and it rains too much, these neat supply and distribution chains that looked so effective on screen tend to fall apart.”