Risk-minded finance leaders should know by now that risks are getting more complicated and effective management strategies require a mindset shift.
Here’s what experts at May’s Riskworld conference said about the risks they and their clients are closely monitoring.
Geopolitics and tariffs. Ongoing trade tensions and geopolitical stability were common refrains from folks throughout the conference. But Shailesh Kumar, head of The Hartford’s Global Insights Center, considered them one and the same. The tariffs were a response to the Trump administration’s perception of unfair trade practices, he said.
“I think most times people think about tariffs as an economic issue or an American political issue,” Kumar said while atop a stage in the bustling and expansive Riskworld exhibit hall. “But there is a geopolitical component to this.”
The world has been on a tariff corkscrew roller coaster ride this year, with the intensity picking up after President Donald Trump’s sweeping “reciprocal” tariffs announcement in early April. Since then, Trump has backed off on many of those tariffs, while most of the rest have gotten whiplash from back-and-forth court rulings.
An overlooked point in the head-spinning trade debate is the tariffs’ impact on US services exports, Kumar said, , including intellectual property, technology, and tourism. Kumar expects countries will start hitting these sectors harder if tensions persist.
Workforce issues. The US workforce shortage goes beyond the accounting industry. This presents numerous challenges, worker safety among them. Jeff Cole, assistant VP of national accounts at insurance company Sentry, told CFO Brew “a large percentage” of workers compensation claims Sentry receives stem from incidents involving newer employees.
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“There’s a heightened awareness and heightened need for loss control services to keep the workers that [organizations] have in a very safe position,” Cole said.
But the risks go beyond the near term. Joan Woodward, president of Travelers Institute, said she’s concerned about a shrinking workforce due to factors like Baby Boomers retiring, declining birth rates, and decades of immigration policies that she said haven’t done enough to help grow the population, and what that will mean for the US economy down the road.
“We saw this in Japan, we see it in China,” Woodward told us. “It’s slowing the economy, and that’s a real demographic long-term trend. We cannot turn the ship around in one or two years.”
Cybersecurity. Cybercriminals are always on the lookout for new and creative ways to wreak havoc on their targets.
Ransomware attacks are hitting organizations harder, and not through ransom demands themselves but from “the business interruption playing on the heels of the ransom attack,” according to Ray Santiago, head of financial lines in North America for Sompo.
Disruption is one of the trends driving bigger insurance claims for clients that hold cyber and public directors and officers liability (D&O) policies with Sompo, Santiago noted. Other trends include third-party data privacy and new regulatory requirements.
He’s seen a rise in “disclosure-based claims,” he said, “whether it be failure to disclose or mistakes, errors, or omissions” when making disclosures required by the SEC. Some clients, he said, have gotten tripped up over the SEC’s newish cyber disclosure requirements.