What’s in Store for ’24
01/04/2024
Kumu Kumar, head of Zurich Resilience Solutions UK, reflects on 2023 and identifies some of the biggest challenges that organisations may face in 2024.
When it comes to business resilience to risks, three key areas have been dominant for organisations in the last year. These are climate resilience, being prepared for cyber-attacks and assessing risks when working with supply chains – all of which will continue to be in the spotlight in 2024.
Climate Resilience
In the last 12 months, organisations have been more focused on understanding their climate resilience. This has been driven by a number of factors. These include consumers having higher expectations from business on sustainability, as well as increased Government mandates forcing organisations to be both accountable and more conscious of the impact they have on the environment.
Over the last year, Zurich Resilience Solutions has seen an increase in customer appetite to understand more about the climate risks they are exposed to and the financial impact this may have. For example, we helped one organisation understand the impact of water levels rising in areas where their sites were based. We worked with them to identify and quantify the risks and then to help with adaptation, to ensure they could be more resilient in the future.
In 2024, climate resilience will dominate the agenda as the government continues to introduce more mandates. One example of this is the Taskforce on Nature-related Financial Disclosures (TNFD), forcing businesses to think about their assets, processes, and finances, to adapt to provide more nature positive outcomes.
Resilience in the event of a cyber attack
Cyber insurance along with consultancy is one area which has seen the biggest change over recent years and is potentially one of the most dominant growth areas for 2024.
In the past, groups of organised hackers targeted organisations via ransomware, but businesses have adapted and are now getting better at protecting themselves against these types of attacks. As a result, hackers are becoming more sophisticated. This means it’s more important than ever that businesses improve their knowledge and assess the risk that cyber-attacks could pose.
Like most things in life, prevention is better than cure. In an ideal world business resilience will be high enough to mitigate cyber incidents. For those that do fall victim to an attack, identifying the issues as early and quickly as possible is key in order the limit to damage incurred.
Given the rapid change in this space, we’re seeing more and more organisations take cyber-attacks more seriously. Historically it was just the large, and more-established organisations that protected themselves by buying cyber insurance. Increasingly, we’re seeing organisations, such as local councils, equip themselves with this insurance.
However, some organisations struggle to purchase cyber insurance, especially if they don’t have the right processes in place to protect themselves adequately. For example, this year one of our customers engaged us to carry out a risk assessment and identify vulnerable areas. We worked with them to address these and once the necessary changes had been made, they were able to purchase cyber insurance and feel protected.
Risk and supply chains
While business may be strong in bolstering their own risk management, they may need to consider the supply chain they work with – especially those most impacted by climate change, cyber and cost cutting.
Organisations have become more sophisticated with how they approach cyber and the control they have with their own assets. But supply chains are outside of their district control and could leave them exposed to cyber-attack. Unfortunately, organised crime groups have started to recognise this and look at ways they can target supply chains to cause mass disruptions.
Risks around climate, cyber and supply chains have been prominent this year and continue to be a key focus for business leaders in 2024. However, transitioning form a low inflation economy to a high inflation economy is likely to be a key issue that organisations need to be prepared for going in to 2024.
We expect to see some organisations tighten their belts. It is important businesses don’t deviate from best practice to plug holes and that they maintain quality risk management to reduce the probability of things going wrong.
2023 has been a challenging year filled with ups and downs. However, lets hope 2024 will be filled with more ups than downs and that organisations are prepared for whatever 2024 throws at them.
You can read this article and further risk insight on the Emerging Risks website.