Lloyd’s has released its third biennial Risk Index [pdf], based on a survey of 588 C-suite and board level executives around the world that asked them to score their attitudes to 50 different business risks across 5 categories, in terms of the priority they place on each risk and how prepared they are to meet it. The survey shows that loss of customers comes in as the second-most prioritized risk (with an average priority score of 6.1 on a 10-point scale, where 10 indicates the highest priority), closely behind high taxation (6.2).
Customer loss is an extremely high priority for the C-suite, but overall, respondents appear underprepared to meet what the researchers say is the “fundamental risk that too few consumers are willing or able to buy their products.” On a 10-point scale of preparedness, respondents gave themselves an average rating of 5.7. That’s significant because of the 50 risks measured, only 4 had lower average preparedness scores than priority scores, and the gap for customer loss was the second-largest overall.
Looking at regional differences in attitudes towards customer loss, the report notes that:
- Latin America has the biggest differential between priority (7.7) and preparedness (6.3);
- Europe has the next-largest gap, coming in with a priority score of 6.7 and a preparedness score of 5.4; and
- Asia-Pacific respondents have a more equal sorting of priority (6) and preparedness (5.9).
Interestingly, business leaders in the US were the only to assign a higher level of preparedness to this issue than priority, although the gap was small.