Risk Management

Cyberattack still greatest risk cited by directors: Willis

Judy Greenwald

April 21, 2022 Reprints

Willis Towers Watson Agents & Brokers Asbestos & Environmental Catastrophes Coronavirus Cyber Risks D&O Emerging Risks Regulation Technology Alternative Risk Transfer/Captives Claims Disputes Claims Management More + Less -

Cyberattack is the top risk cited by company directors, followed by data loss and cyber extortion, says a global survey of 437 directors issued by Willis Towers Watson PLC on Thursday.

The survey report, which was issued with Clyde & Co., said the next biggest risks cited by directors was regulatory risk, including the threat of fines and penalties, and the risk of health and safety/environmental prosecutions safety legislation.

The top risks reported in the 2021 survey were cyberattack, followed by data loss, regulatory risk, risk of safety legislation and risk of employment claims.

Among other survey results, despite the attention paid to climate risk, it remains outside the top five risks in any region.

However, the survey report warns that despite this, climate and environmental social and governance risks “will continue to increase for directors and officers as governments, regulators and stakeholders seek to bring about the rapid changes required to meet international climate and ESG commitments in the run up to 2030 and beyond.”

The survey report also said that because of the steep increase in insurance rates over the past two to three years, there has been a “lot of discussion” about potential alternatives to purchasing D&O insurance from the commercial insurance market, including captives.

In its regional overview of North America, the report says it is the only region where directors and officers rated “return to work/COVID safety” and “social engineering crime” as numbers four and five top risks respectively, with neither appearing in any other region’s top seven list.

“In the U.S. in particular, there has been more COVID-related litigation than in other regions, although perhaps not as much as many insurers may have anticipated,” the survey report says.