Business Interruption Biggest Risk Issue for NZ Business

Business Interruption Biggest Risk Issue for NZ Business: Marsh Survey

Auckland, 1 October, 2012 – Concerns about business interruption have topped the list of risk issues affecting businesses in New Zealand, according to a survey published today by insurance broker and risk advisor, Marsh.

The result comes in the wake of local and global natural catastrophes over the last two years – most notably the Christchurch earthquake – and, given that only 20% of the survey respondents were from the Canterbury region, highlights the impact these events have had on all businesses in New Zealand.

Marsh’s fifth biennial report into the risk management practices of New Zealand businesses, found that non-compliance with legal and contractual obligations, destruction of assets by fire, flood or some other natural disaster, lost productivity and reduced staff efficiency and data-related risk were among top concerns for firms.

The survey asked those who had suffered a major loss in the last three years if a 12 month indemnity period in their business interruption policy was long enough for their business to return to the same gross profit that they enjoyed prior to the loss. Just over 33% said that this was not long enough while a further 17% were unsure. Most (44%) felt that 24 months was an appropriate timeframe for business recovery, while 33% nominated 36 months, with a further 22% suggesting 18 months.

Grant Milne, Country Head of Marsh New Zealand, said: “Recent natural disasters have made us all much more conscious about the safety of our people, our assets and the continued running of our businesses should a major event occur. Unfortunately many businesses still underestimate the time it can take to recover following a major incident, so it pays to be realistic about how long it could take.”

Respondents also named business continuity as the leading ‘emerging risk’ with 27% saying they did not have a plan in place to manage this risk.

“Marsh has always recommended to our clients that they should have a good business continuity plan in place”, said Mr Milne. “As a business that was personally affected by the Canterbury earthquake, I am an even stronger advocate for this. I have seen first hand the huge difference these plans can make on keeping your organisation operational through a crisis.”

A full copy of the survey can be downloaded by clicking here.


About Marsh
Marsh, a global leader in insurance broking and risk management, teams with its clients to define, design, and deliver innovative industry-specific solutions that help them protect their future and thrive. It has approximately 25,000 colleagues who collaborate to provide advice and transactional capabilities to clients in over 100 countries. Marsh is a wholly owned subsidiary of Marsh & McLennan Companies (NYSE: MMC), a global team of professional services companies offering clients advice and solutions in the areas of risk, strategy and human capital. With 52,000 employees worldwide and annual revenue exceeding $10 billion, Marsh & McLennan Companies is also the parent company of Guy Carpenter, a global leader in providing risk and reinsurance intermediary services; Mercer, a global leader in human resource consulting and related services; and Oliver Wyman, a global leader in management consulting. Follow Marsh on Twitter @Marsh_Inc.

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