Against all odds

From the protests in the Middle-East to the rise of cyber crime and the continuing trials and tribulations of Western economies, these are nothing if not interesting times. StrategicRISK, in association with Marsh Risk Consulting, has released a report analysing European companies’ risks in five categories: economic, environmental, geopolitical, societal and technological.

The report summarises the comments of 30 leading risk management professionals in European companies. While their views varied somewhat, refl ecting diff erent sectoral concerns, the single issue that all voiced was the interconnectivity of risk and its unpredictability.

One example of this is last year’s ash cloud resulting from the Icelandic volcano eruption. Even companies that did not have suppliers in Iceland, and perhaps felt they had little or no exposure to natural catastrophes, did suff er disruption in deliveries. As one risk manager said: “There seems to be an increase in one risk triggering another – and that’s a risk in itself.”

Another risk manager foresaw problems arising from the Australian fl oods. His firm has no direct suppliers in Australia, but the country does supply raw materials to some of its producers and the fl oods may well aff ect the availability of these.

Interconnectivity is probably most apparent in the economic risk category. The ‘butterfl y eff ect’ – that is, a small change in one place in a complex system that can have large eff ects elsewhere – has never been more apparent than in today’s globalized system. The fi nancial markets are particularly interdependent.

Click the link on the right hand side of the page to download the report

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