More than 50% of UK businesses are taking more risks as economy improves – QBE

Signs of economic recovery have prompted businesses to take more risks than two years ago, according to QBE’s head of risk solutions Richard Thomas (pictured).

Speaking after the publication last month of the insurer’s research, which revealed that 54% of the companies surveyed were taking more risks than 24 months ago, Thomas said businesses are feeling more bullish about taking risks and are doing so to gain competitive advantage.

Thomas told StrategicRISK: “The UK is coming out of the most serious financial crisis in 80 years, so the economy is certainly having a big influence on business’s risk-taking practices. 

“Businesses have to diversify to survive. They also have to target new customer markets, deal with new suppliers and expand the geography of their operations.”

Companies also feel that they are working in riskier environments, with 28% stating that their trading environment is riskier now than six months ago. 

Thomas said: “Intensified competitor activity and market-pricing are cited as the key areas of threats for the businesses with which we spoke.

“The businesses we spoke to also highlighted cyber-crime and data security as growing areas of risk.”

Despite these findings, almost one quarter of the 400 businesses surveyed deemed risk management inadequate. Respondents said that in thepast two to three years, their risk management performance was “as much by chance as by judgment or design”.

However, Thomas explained this was changing and that more businesses are now investing in risk management: “There is a greater awareness of risk and a desire to improve how risk is managed. In the past four to five years, businesses have been in survival mode, but now that the economy is turning around, companies feel they have the breathing space to invest and manage risks differently.

“They are prepared to consider all areas of risk management, from asset protection and energy supply and costs to supply chain capability.”