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.
In a new report 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.
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.
Levene added: “Boards are spending an increasing amount of time discussing the associated risks, but it is imperative that they use the right information sources to understand the true threats. At Lloyd's, understanding and dealing with major risks is at the heart of all we do.”
