Environmental Risk Tops the List of Emerging Concerns for Mid-Size Companies across Europe, Says New ACE Research
LONDON--(BUSINESS WIRE)-- Environmental issues are climbing the corporate risk agenda in Europe, according to new research released by ACE Group today. In the study, environmental risk is named as the top emerging concern for companies in the UK (cited by 38% of respondents) and France (33%) as well for as mid-sized companies1 across Europe generally (35%).
The findings are published against a backdrop of an environmental risk landscape that has experienced dramatic change during the last decade, driven by evolution in societys attitudes as well as legal and regulatory developments. Today, ACE estimates that there are over 250 pieces of legislation which have environmental implications in the UK alone. The European Liability Directive (ELD), in particular, has significantly changed the exposure of European companies, especially for those in Central and Eastern Europe, which faced less stringent requirements previously.
The research suggests that a significant number of todays European companies have seen or experienced the effect of environmental issues first-hand. Over 40% cite the impact of previous disasters on their own business as a reason for their increased concern. In addition, nearly 40% say that increased attention from media, interest groups or society generally has been a key driver in changing their approach to environmental risk.
ACEs research also suggests that the momentum around environmental risk awareness is growing. Two-thirds of companies (66%) believe environmental risk is an increasingly important issue for every 21st century business. The majority (54%) also expect the level of risk their own company faces to increase over the next five years.
However, according to the findings, heightened concern is not necessarily translating into mitigation action. Only 52% of European companies have crisis management procedures in place to deal with an environmental incident. Furthermore, 25% of companies surveyed believe they do not need crisis management procedures for these risks at all, despite the fact that almost every industry today can face environmental risk exposures that may have catastrophic cost implications if they are not assessed and mitigated correctly. In addition, around a third of companies either do not have specific insurance in place to cover environmental risks, are unsure whether or not they have cover, or think that the risks are covered by another insurance policy.
Encouragingly for the insurance industry, however, 43% of companies view insurers as the leading source for information on the environmental risk environment. In addition, almost two-thirds of companies (64%) say that insurance is of importance to their environmental risk management strategy.
Tom Hillier, Environmental Liability Manager for UK & Ireland at ACE, said:
Environmental risks are no longer only a concern for larger businesses or confined to the traditional polluting industries. Today, business interruption and reputational damage resulting from environmental exposures can have a devastating impact on the balance sheet of any company and businesses need to protect themselves against the full range of risks.
Dorothee Prunier, Environmental Manager for Continental Europe, also responsible for the underwriting of environmental solutions at ACE, said:
An important first step is to conduct an environmental risk audit, to understand where exposures lie and pinpoint where action is needed to cover the gaps. One of these may be in the area of insurance, where claims can fall outside the scope of a standard property or liability policy. With a third of European companies lacking or unsure about environmental insurance cover, our research suggests that the insurance market needs to do more to raise awareness of the risks and the solutions available.
The ACE Group is one of the worlds largest multiline property and casualty insurers. With operations in 53 countries, ACE provides commercial and personal property and casualty insurance, personal accident and supplemental health insurance, reinsurance and life insurance to a diverse group of clients. ACE Limited (ACE), the parent company of the ACE Group, is listed on the New York Stock Exchange (NYSE: ACE) and is a component of the S&P 500 index.
Notes to editors:
The research for ACE Insurance was carried out between: 13 / 04 / 2012 and 03 / 05 / 2012 by Opinion Matters who spoke to 606 European Risk managers / CROs / CFOs / COOs / people responsible for buying insurance from companies with turnover of £500 million+ for the UK and their equivalent in the European countries.
1 Companies with revenues EUR 500m EUR 700m
Susie Burnett, Grayling
+44 (0)20 7932 1867
Louise Naqvi, Grayling
+44(0) 207 592 7924
Source: ACECopyright Business Wire 2012