If you can believe it, we’re already a month into 2023, and the commercial insurance market is preparing for another potentially turbulent year ahead. When it comes to protecting your business, knowing where risks are headed rather than focusing on where they currently stand is a critical first step. Below, we offer some of the key risks on the horizon according to the 2023 Risk Barometer report from Allianz.
Cybercrime Remains a Top Threat
Since the onset of COVID-19 in 2020, cybercrime has climbed to new heights in the face of a changing workforce. Cyber incidents like IT outages, ransomware attacks and data breaches are once again a top risk as the world continues to grapple with this growing threat. A cyber incident can impact not only a business’s bottom line, but can also cause major reputational damages. RCM&D’s Cyber RiskScript process is designed to prepare your business for the volatile market and is supported by tools including self-assessment questionnaires, non-intrusive vulnerability scans, limit modeling and technical consulting.
Macroeconomic Risks
From the Russian invasion of Ukraine to historic inflationary trends and the threat of a recession, there is no shortage of macroeconomic risks in 2023. Globally, recession and inflation will be key issues to monitor as we continue through the year and mitigation efforts by central banks continue. This is having a significant impact on the property insurance marketplace, resulting in increases for January 1 reinsurance rates and retentions, combined with a reduction in capacity; treaties for direct and facultative reinsurance were renewed at a 45% increase on average.
Supply Chains and the Rising Cost of Energy
As energy costs increase worldwide, many businesses in the manufacturing industry have been forced to significantly alter operations. This change has led to supply chain shortages as the industry is still reeling from the initial impact of COVID-19. Companies in Europe are feeling the heat of rising energy costs even harder as most are heavily reliant on Russian gas reserves. RCM&D’s Property & Casualty division is an excellent resource for supply chain issues and can help your business find coverages designed to mitigate supply chain risks.
Changing Regulation Raises Compliance Concerns
Regulatory measures to address issues like cybercrime, environmental concerns and social issues continue to create a tricky road to compliance. This rocky regulatory landscape emphasizes the importance of partnering with a broker who can provide a roadmap to ensure there are no operational oversights. RCM&D subsidiary SISCO has several viable service options that can help keep your business in compliance.
Climate Change and Natural Disasters
Natural disasters have been a continual top threat for insureds, and 2022 was another rough year. From flooding due to Hurricane Ian in the southeast to wildfires in the west, businesses nationwide are bracing themselves for another difficult year in 2023. RCM&D’s Catastrophic Modeling and Data Integrity solution can help you keep accurate, complete and validated data for making critical decisions regarding the risk and insurance needs of your asset portfolio in the event of a catastrophic loss. January 1 reinsurance treaties renewed with average increases of 37%, which represents the largest year over year increase since 1992.
Attracting and Retaining Top Talent
Adding to the laundry list of economic obstacles is the current shortage of talent in the workforce and the struggle for businesses to attract and retain top employees. Businesses will need to take a hard look at things like employee benefit packages to ensure they stay ahead of the curve on this issue. RCM&D’s Employee Benefits division can help you tailor a benefits plan to mitigate risks related to attracting and retaining top talent and win in a competitive environment.
Political Problems
Similar to macroeconomic risks, political issues like Russia’s invasion of Ukraine remain a top threat in 2023. In the United States, political unrest has already made headlines as protests erupt in cities across the country in response to the police-involved death of Tyre Nichols.
Preparation Is the Key
While times may be tough, RCM&D stands ready to help mitigate the risks your business can face in 2023. Our dedicated service teams are prepared with innovative solutions and can provide tailored services to ensure you’re ready for what’s next.
Talk to a trusted advisor today for more on the top risks for 2023 and how we can help.