Unpredictability a growing concern for business, finds QBE
Research by QBE Business Insurance empirically proves the world is getting more unpredictable. The QBE Unpredictability Index finds that the world has become more unpredictable over the last 30 years, with economic and business factors the principal drivers of uncertainty over the last decade.
The report combines trend research over the last 30 years and interviews with more than 1,300 senior business executives in the UK, France, Germany, Italy, Spain and the Nordic countries.
Across five pillars that form the index economic, political, societal, environmental and business 2010 was singled out as the most unpredictable year of the last three decades.
Almost all the least predictable years in the index are since the millennium and most of these have been since the 2007/08 global financial crash.
The cost to business of unlikely events is pronounced. Four in five businesses surveyed (78 percent) have been significantly impacted in the last 10 years by one or more pillars of unpredictability, with economic events having the most severe impact.
Almost a third (29 percent) of UK executives said their company had lost revenue as a result of unforeseen events, while 22 percent experienced a decrease in demand for their products or services.
A further one in four (21 percent) has either suffered disruption to supply chains or had to accommodate unplanned for costs.
Almost half (45 percent) of UK executives say political uncertainty is the biggest risk facing their business in the future, compared with 33 percent of European business leaders.
Companies in the UK are the least equipped of those surveyed to handle surprises: more than one in four said they were not prepared to deal with unforeseen circumstances.
Cécile Fresneau, executive director, UK Insurance, said: “Unpredictable events are not by their nature negative, it is often how businesses are equipped to respond that ultimately defines them as good or bad.
“Risk is a normal part of life and with the right preparation there are ample rewards to be had,” she added.
