Findings of Clements Worldwide Risk Index 2016

Clements Worldwide, a leading provider of international insurance solutions, releases a bi-annual report on global risk to help international organisations validate their present action plans and prepare for different risk types. The latest Clements Worldwide Risk Index, published on September 22, 2016, was based on data gathered from March to May 2016 from 409 executives responsible for global risk management. A majority of respondents, about eighty-five percent, have more than 100 employees. Here are the highlights of the report:

The participants

The respondent organisations are primarily composed of companies hiring more than 1,000 full-time employees in its home headquarters and international offices. Among the respondents, 39% have total revenues equivalent to USD50M or more. Twenty-nine percent have USD 10M – USD50M in total revenues, 22% with USD1M – USD10M and 10% with less than USD1M revenues.

A third of the organisations are non-profit organisations (NGOs) or Development organisations. The others are government contractors, construction firms, international schools, oil & gas companies, etc.

More than half of respondents maintain headquarters in North America while 29% are in Europe. Most of the respondents put the highest priority on their operations in Europe, Asia and South America.

Thirty-seven percent of respondent have 11%-33% of their staff assigned overseas while 36% have 34%-75% of their workforce stationed abroad. Eighteen percent have 76% or more or their staff overseas, and 9% have a maximum of 10% of their employees work abroad.

Organisations with 11%-33% of their staff assigned overseas conduct 37% of their operations outside their home headquarters in different countries.

According to 46% of respondents, the executive leadership oversees internal global risk management for their organisations. About 27% have the task assigned to a Global Risk Manager while the others rely on their Chief Financial Officer or Legal Counsel.

Global risk concerns

In Winter/Spring 2016, 27% of respondents claimed that global risk concerns caused their organisation to delay of abandon global expansion in the last 12 months. This rate rose to 35% in Summer/Fall 2016.

The top five risks blamed for the largest losses abroad of respondents over the past five years are business interruption, property damage, general liability, political/labour unrest and medical personnel needs.

The top five risks respondents are most concerned about are cyber liability, terrorism, medical personnel needs, business interruption and property damage.

The top risk respondents feel most prepared to respond to during overseas operations is personnel medical needs.

For 2016, 41% of respondents believe that they need to be more prepared for viral diseases while 28% said that there should be greater access to better medical facilities. Meanwhile, 23% claimed that medical evacuation should be prioritised and 8% said that respondents should have greater access to electronic medical records.

Over the past 12 months, 52% of respondents said that their international risks increased compared to 45% who claimed that the risks they face abroad stayed the same. According to 3% of respondents, their international risks decreased in past 12 months.

In the past year, spending for the respondents’ business international insurance stayed the same for general liability, group travel accident, business interruption, property and kidnap & ransom.