How to tackle the biggest business risks for 2024

Our UK Business Risk Survey revealed the biggest concerns facing UK business leaders. CEO Alistair Fraser assembled a panel of experts to highlight the potential solutions required to help you manage those risks.

View the full recording above or catch up on the key takeaways below.

Tackling financial uncertainty

Skip to 00:03:18 in the recording

34% of business leaders in our UK Business Risk Survey cited financial uncertainty as a concern for 2024 – the number one concern.¹ Peter Heffer, Head of Client Services, Marsh Commercial, explained how you can build financial resilience and the importance of protecting your business from underinsurance risk.

Key takeaways

1. The ways you can build financial resilience:

• Trade credit insurance helps protect you against customers failing to pay for goods or services provided on a credit basis, usually due to insolvency or lack of funds.
• Premium finance helps make your insurance payments more affordable through regular, monthly payments rather than a large sum up front.
• Surety bonds are a promise to be liable for the debt, default, or failure of another. It is a three-party contract by which one party (the surety) guarantees the performance or obligations of a second part (the principal) to a third party (the obligee). This can help release valuable working capital.
• Total cost of risk is the measure of not just premium expenditure but also premium, taxes, claims within excesses and other risk related costs to ensure the best return on capital.

2. When something’s missing it’s a risk - mind the underinsurance gap

Despite 34% of leaders citing financial uncertainty as a top risk, 75% said they haven’t reviewed their property reinstatement values in the last year.

Underinsurance is a common but often overlook issue that can have serious consequences for any business. It can occur if the value of your assets increases but you don’t raise your insurance coverage, leaving you exposed to financial and operational risks in the event of a major incident.

Regular property risk surveys and valuations can give you peace of mind that you have the right level of protection in place.

Reducing health and safety costs

Skip to 00:11:41 in the recording

29% of respondents plan to review their health and safety policies and process this year. Building on the 51% who have reviewed their health and safety efforts in the last 12 months. 1 Julianna Forsyth, Risk Consulting Leader, Marsh UK, discussed some of the ways you can reduce health and safety costs in your business.

Key takeaways

1. Three smart ways to reduce health and safety costs in your business:

• Health and safety competent person support.
• Safety culture survey and behaviour survey.
• Accredited training courses.

2. Build claims defensibility through two interrelated principles:

• Risk control
• Incident response and management

3. Put checks in place to help ensure you’re covered from claims enforcements e.g. working at height, machine maintenance and guarding.

Download the full guidance for adopting safe practices in your workplace.

Communicating your ESG credentials

Skip to 00:20:25 in the recording

Environmental, Social, and Governance (ESG) standards for UK businesses are becoming increasingly important. For instance, reporting on ESG performance is already mandatory for large businesses.

However, that doesn’t mean that ESG is only an issue for larger firms. Eric Alter, Risk & Cyber Engagement Leaders, Marsh UK, explained more about ESG and many of the actions you may already be taking that contribute to ESG risk management.

Key takeaways

1. ESG is a framework to map out a company’s impact on the world, and what it’s doing about it.

2. Stakeholders are demanding transformational change; a view on your ESG performance is critical.

3. ESG may feel complicated, but it’s actually a six-step process:

• Screening: Highlights ESG strengths and weaknesses in your organisation and your supply chain.
• Risk register: Informs and educates board and stakeholders on ESG risks and opportunities.
• Modelling and surveys: Measures and prioritises the financial impact of risks for your business and supply chain.
• Reporting: Best in class write-up, communication, and assurance of ESG preparedness.
• Adaption and resilience: Embedding ESG adaptation and resilience within “business as usual”.
• Risk transfer: Early/informed action for current and emerging ESG insurance and investment needs.

Request the ESG Risk Rating tool.

Supporting employee health and wellbeing

Skip to 00:29:38 in the recording

Employee mental health and wellbeing was the second biggest concern of business leaders in our risk survey, with 47% of leaders taking steps to alleviate this concern. 1 Mark Sharpe, Principal Consultant, Mercer Marsh Benefits (MMB), explained how to better support employees and the rewards that come from fostering a happier, healthier workforce.

Key takeaways

1. The three factors for managing people risks:

• Benefits for all: Your benefits need to reflect the needs of the people in your business.
• Benefits for a fast-changing World: Building ongoing resilience and balancing human with digital healthcare at a time of rising costs.
• Benefits for healthier societies: Design for emotional wellbeing and mitigate risk for the unwell.

2. Proactive, preventative action can be more effective than reactive care.

3. The benefits of an organisational mental health ‘ecosystem’.

Get an in-depth look at the health trends and strategies that will help your business and your employees to succeed. Download the MMB Health Trends 2024 report.

Talent retention and recruitment

Skip to 00:42:09 in the recording

22% of business leaders cited talent retention, attraction and succession planning as a key concern - #4 overall.1 Rachel Riley, Commercial & Consumer Leader, Mercer Marsh Benefits discussed the ways you can keep your people healthy and engaged.

Key takeaways

1. Employee benefit needs are changing; employers who adapt will win the war on talent.

2. Consider benefits for the whole workforce and ensure you have an effective communication strategy.

3. Introduce Generation Z into your benefit strategy. Multiple innovative solutions appeal to Gen Z e.g. alternative mental health therapies, preventative cancer screenings.

Benefits for all. The secret to thriving employees and thriving businesses. Find out more in MMB’s Health on Demand 2023 report.

Supply chain risks

Skip to 00:49:45 in the recording

23% of business leaders are concerned about supply chain reliance and disruption – the third biggest concern.1 With business leaders also confident about the year ahead – productivity (50%), turnover (47%) and profit margins (46%) are expected to increase1 - are your processes resilient enough?

What are the implications of a supply chain failure? Eric Alter, Risk & Cyber Engagement Leaders, Marsh UK, discussed these questions and the possible solutions.

Key takeaways

1. The implications of a supply chain failure include:

• Supplier interruption: Business interruption implications (damage & non-damage & regulatory change).
• Sustainability and social responsibility: Supply chains are becoming increasingly important as part of net zero emissions strategies as well as public awareness and regulations being strengthened to protect customers, workers and the environment.
• Loss of IP and data: With fully integrated and supply chains, IP and data are at risk. Cyber crime can also cause severe disruption. It’s also important that organisations operate cyber and data risk management throughout their supply chains.
• Preparing for disruption: Implications of recalls on the supply chain (supplier to supplier disruption).
• Physical damage: By its nature, supply chains involve the movement, storage and processes of physical assets, this presents a range of physical risks.
• Political risks including terrorism and industrial action: Social instability and change can be sudden and bring significant risks to operations.

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Sources

1. marshcommercial.co.uk/risk-hub