Over one third of companies avoid investing in overseas markets due to political risk fears, according to report
Increased concerns at board level regarding terrorism and political violence risk is causing businesses to avoid investing in politically sensitive areas or locating offices in large cities, according to Lloyd’s.
A new report, ‘Under Attack: Global business and the threat of political violence’, issued today by Lloyd’s reveals that over a third of companies avoid investing in overseas markets for fear of political violence, while 20% have forgone promising business opportunities for the same reason. However, there appears to be a significant gap between risk awareness and an actual understanding of the key threats.
“There is a large gap between what businesses perceive as a threat and the reality
Lord Levene, chairman of Lloyd’s
Lord Levene, chairman of Lloyd’s, believes businesses need to understand their risks better, saying: “There is a large gap between what businesses perceive as a threat and the reality. Many companies are changing their plans based on perceived threats, which is a problem if their information is incorrect.
“Our research shows that many businesses rely on international media coverage to come to a decision on what risks they face. Media coverage tends to focus on radical religious terrorism and rarely touches on the emergence of new risks, such as threats to supply chains, cyber terrorism, home grown terrorism and the threat of chemical, biological, nuclear and radioactive attack.”