|By Robert O'Connor|
|A.M. Best Company, Inc.|
The economic turmoil that has swept the world has left business leaders with the sense that they are operating in a more perilous environment, according to the second Lloyd's Risk Index.
"In all regions of the world, across all sectors, business leaders now perceive the world as an inherently riskier place," Lloyd's Chief Executive Officer
Businesses are less worried about getting access to credit than about losing customers as a result of government austerity efforts in Western nations, the report found. The report also pointed to a "surprising" jump in concern about talent shortages. This is now the second-greatest worry that businesses have, the report said.
Other concerns include reputational risk and the effects of currency fluctuation and changing legislation.
The Lloyd's Risk Index 2011, which followed on from the first index published in 2009, was based on a survey conducted by the
"Three years on from the start of the worst financial crisis for more than a generation, there is still uncertainty about the future," the report said. "Will we manage to avoid a double-dip recession and emerge into a period of growth? If we do, will it be strong growth, or a prolonged period of slow progress, as many economies are currently experiencing?"
The report pointed to the burden of debt and poor growth prospects in a number of developed economies. "Meanwhile,
The survey, Ward said, demonstrated that "perceptions of risks have evolved significantly" since 2009. The report found a rapid increase in risk awareness in the
The report followed up the first index, which was published in what Ward described as a "highly charged" environment marked by the failure of banks and businesses. The next index is due to be released in 2013.
"In the last two years, the world has been thrown into economic and political turmoil from which it has yet to emerge," Ward said.
Sounding a warning against over-confidence, the report cited optimism among business leaders that they are well prepared to meet 48 of the 50 risks they face. "When it comes to risk management planning, businesses need to increasingly think the unthinkable in order to identify all their vulnerabilities and minimize them," Ward said.
The survey, which was conducted in
Lloyd's has a current Best's Financial Strength Rating of A (Excellent).
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