“Volatility in one area can have repercussions in another, prolonging a period of uncertainty.”
Unpredictability affects companies differently, varying by their size, location and sector. Brokers may tailor their solutions based on research within The QBE Unpredictability Index 2019 which finds that periods of instability are becoming longer whilst stability is decreasing. Staying abreast with what is impacting the end-client will ensure that you can remain competitive.
In the short-term, politics is a key concern for businesses but in the medium-to-long-term, the macro economic and commercial environment is what continues to challenge them. Manufacturers and retailers, for example, are vulnerable to disruption in trade or their supply chains, while service companies are more likely to be concerned with regulation and cyber security. Many firms are already operating on squeezed margins and are particularly vulnerable to a significant increase in exposure, disruption or volatility.
The most common impacts of unpredictable events are a loss of revenue, unexpected costs and decreased demand. However, some businesses have seen their fortunes change as a result of unpredictable events and more importantly, it is the interconnectedness of factors that is a compelling find.