RSA: Risk taking vital for healthy economy
A fear of risk induced by the credit crunch is causing UK firms to miss out on valid business opportunities, according to new research by RSA.
Over-cautious business leaders are shunning risk despite recognising that risk taking is an important part of building a profitable business, the study warned.
Nearly two thirds (63%) of business leaders polled believe there will be opportunities to grow their business during the recession.
Despite this apparent optimism, only 45% said they actually expect to see growth.
RSA warned that a focus on short-term survival could slow down growth and reduce prosperity.
“For many businesses today, survival equals success,” said Neil Lightbown, RSA’s UK underwriting and strategic claims director.
“But in focusing on the immediate they are at risk of missing wider opportunities.
“Missing these opportunities threatens to delay their own success and the wider recovery of the UK economy.”
The caution of business leaders is “understandable” given the perception that unchecked risk-taking caused the credit crunch, Lightbown said.
However, “the pendulum has swung too far,” he added.
“Risk is a crucial, fundamental part of business decision-making.
“We need to better understand acceptable risk or we will be so cautious in our business dealings we will ignore the potential green shoots of economic recovery.”
RSA surveyed 250 UK business leaders and 1,000 members of the public.
Seven in ten of those polled said they react to perceived risk rather than actual risk, while 58% said they prefer caution to risk taking.
Category: Insurance News, Royal & Sun Alliance News
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