Political risk ranks highly for top concerns: WTW report

Almost three quarters of respondents, or 74%, said that political risk was among the top five risks facing an organization, according to the Political Risk Survey and Report Thursday from Willis Towers Watson PLC.

For 11%, political risk was the No. 1 risk, although the companies saying it was their top risk were disproportionately likely to be in the government contracting, transport or mining sectors, according to the report.

A vast majority of respondents, 89%, said their company proactively monitors political risk, up from 64% in 2022, showing how the threat’s profile has grown over the past few years.

The current geopolitical uncertainty and daily vicissitudes were reflected in the report.

More than half, or 58%, said they expect trade wars to have a negative financial impact on their organization in 2025.

More than a third, or 38%, said they experienced a negative financial impact from the Middle East conflict in 2024.

Political risk is now present where previously it was not.

“Geopolitics is an integral part of our thinking now – it’s fundamental,” said one manufacturing executive on the interview panel. “Ten years ago, we’d just think about finding the lowest bidder, but now every project has a geopolitical angle.”