Business disruption, cash flow top risks for Indian companies amid economic slowdown

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After an economic slowdown, business disruption and cash flow/liquidity risks are the two biggest risks for Indian companies in the coming years, a new report said on Thursday.



While 83.3 percent of Indian companies expect the overall cost of insurance risk to rise, companies are the least prepared for reputation risk, according to the global professional services firm’s report. aon.

“Indian companies are growing in need of periodic insurance review and proactive planning to mitigate insurable risks,” said Jonathan PipeDIRECTOR, India at Aon.

“We have seen a significant increase in the use of captives to transfer risk, as well as greater support from outside experts in assessing all potential business risks,” he added.

Companies are releasing additional budgets to manage and mitigate their potential risks, especially accelerated changes in market factors, economic slowdown and business interruptions.

“With better planning and expert advice, most risks can be managed efficiently,” he said.

Organizations are shifting their focus from event-based to impact-based risk assessments in the country.

For example, the business interruption was once viewed as a linear risk, but Covid-19 and geopolitical risks have shown how it can affect multiple industries and businesses simultaneously and globally, the report said.

However, companies are the least prepared for reputational risk and none of the respondents have risk management or continuity plans for this.

Nearly 50 percent of Indian companies cited economic slowdown/slow recovery as one of the biggest risks having suffered losses, the report said.

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