Domestic challenges for U.K. risk managers: Study

A survey of United Kingdom risk managers' attitudes to business risks carried out by U.K. insurance company Royal & SunAlliance Insurance Group P.L.C. has found that they are turning their attention away from macroeconomic and international problems to more domestic and business continuity type challenges.

According to RSA, competition is currently the biggest risk facing businesses followed by oil prices and regulatory requirements.

The fastest growing risks that face British businesses are, however, mainly U.K.-based, such as power cuts, data systems failure and corporate indentity theft. Terrorism has reportedly had little impact on businesses, found the survey.

RSA says that power cuts are regarded as a fast-growing risk because Britain faces a shortfall of energy by about 2025. Power shortages are forecast to have their biggest impact upon service-based industries, because of their reliance upon information technology, said the company.

The proposed extension of the congestion charge in London, and the formulation of more pilot road charging schemes throughout the country next year, have increased business worries about future transport problems, said RSA.

"Unsurprisingly, transport and communications firms expect transport problems to increase dramatically over the next twelve months," it added.

Telecommunications failure and data security breaches are expected to increase in the future, according to RSA, because of the almost universal business usage of telecommunications and information technology, in conjunction with a rapid increase in the number of computer viruses. Between 1999 and 2005 an extra 100,000 viruses have been identified, it noted.

According to the Metropolitan Police, corporate identity theft cost British business £50 million ($97 million) in 2005 while the market-to-book ratio of share prices has increased significantly as the value of intangible factors, such as brand has increased, over the last decade, said R&SA. "The cost to businesses of corporate ID theft is set to increase dramatically in the future," stated the insurer.