A large number of communications, media and technology companies see their risks becoming more complex or larger in the years ahead. While that awareness is high, however, protection and preparedness in the three sectors is disproportionally low, Marsh found in a new report.
About 88 percent of risk professionals in those three sectors said they see their risks worsening or becoming more complex in the coming months and years, according to Marsh’s survey of 120 risk professionals. They ranked data security and privacy (cyber) as their greatest risk, followed by technology errors and omissions, intellectual property, employee safety, regulatory compliance, business interruption, multinational exposure, directors and officers liability, mergers and acquisitions.
But risk awareness appears to be much different than risk prevention. Marsh found, for example, that while 77 percent of respondents saw cyber as a great concern, just 36 percent said they were protected enough to combat it. Nearly 70 percent said they saw E&O as a big worry, but only 45 percent asserted they had full protection for that risk. Fifty-seven percent of respondents said regulatory risk was “of great concern,” but only 23 percent believed they had enough protections in place.
As Marsh noted, four of the top five risks are related to emerging technology, which isn’t necessarily the easiest thing to assess.
“These [risks] tend to be the most difficult to quantify and assess due, among other things, to contractual requirements with customers and vendors,” the Marsh report noted. “Risks for which companies had a high level of confidence in their mitigation programs tended to be more ‘traditional,’ such as those related to property, auto liability, D&O and cargo loss.”
In fact, just 41 percent ranked property damage as a major concern, while 80 percent said that they had either mostly or completely mitigated that risk, according to Marsh.
Tom Quigley, Marsh’s U.S. Communications, Media and Technology Practice leader, argued that innovation and the speed at which it arrives create challenges, but there are ways to meet them.
“The fast pace of innovation that defines communications, media and technology companies brings a host of risks related to everything from shifts in customer demands to changes in regulations to industry consolidation,” Quigley said in prepared remarks. “By using the right risk assessment tools, data, analytics and insights, CMT risk professionals are best positioned to manage these risks and protect their companies’ bottom lines.”
Marsh’s full report is called “2017 Communications, Media and Technology Risk Study.”