2024 Business Threats, international business risks

Starting a new business year is always exciting for companies. It is the time to reflect on the year that has passed and develop for a better year. Most companies already have a business plan for 2024 and are ready to execute.

While preparing for an even more successful year, every company must understand the 2024 business threats. Risk management is crucial to business planning and protecting a company from sudden threats.

Threats change every year; therefore, risk management strategies must change too. Businesses may be unable to predict every possible risk but must be aware of the top 2024 business threats.

Hence, the article will explain the main 2024 business threats that every company must be aware of. In addition, the article will also highlight the various insurance policies that can help protect businesses from these threats.

Main 2024 Business Threats

Cybersecurity Threats

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There were nearly 6 billion recorded data breaches and cyber-attacks in 2023. The most common cyber-attacks were phishing and ransomware attacks. In 2024, cyber-attacks will be once again one of the biggest threats every company must have protection against.

Whether the company is a large corporation or a small business, any firm could be a victim of cyber-attacks. The main 2024 cybersecurity threats will be the growing rise of ransomware and stronger AI-powered attacks. The 2024 business threat can seriously disturb the business, steal the data and ruin the company’s reputation.

Companies must have a risk management plan to avoid and deal with possible cyber threats. Every business must make sure its cybersecurity is updated for 2024. Even if high-quality cybersecurity costs a bit more, it will be worth it compared to the potential thousands to millions in loss.

However, with the rise of AI power attacks and human error, many cyber-attacks may slip through even the best cybersecurity measures. Hence, companies must have cyber insurance alongside their cybersecurity. Cyber insurance will cover cyber experts’ advice, threat removal, data recovery, informing third parties and financial loss.

Cyber insurance will help businesses deal with 2024 cyber-attacks and come out stronger with a highly reduced financial loss.

Economic Instability

No matter what a company does, the economy is always a concern, local or worldwide. Factors such as unemployment, exchange rates, inflation and supply & demand can impact any business and its profit. Experts predict in 2024, the economy may be unstable and slightly riskier than in 2023.

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The 2024 economic outlook will not be the worst, but a noticeable slowdown. OECD (Organisation for Economic Co-operation and Development) recorded global GDP growth of 2.9% in 2023 and predicts a mild slowdown to 2.7% in 2024. In addition, Asia is expected to continue to account for the bulk of global growth in 2024.

Companies can purchase trade credit insurance to help deal with the possible 2024 business threat. Trade credit insurance is a policy that will protect a business from non-payment or significantly late payments due to commercial or political risks. The insurance will reimburse a percentage of the unpaid amount to allow the company to keep functioning

It is the ideal insurance for B2B companies that sell products internationally or locally on a trade credit basis.

Geopolitical Uncertainty

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The political situation has been an issue for a few years, with no signs of things resolving. There are ongoing wars, political disagreements and increased international trading restrictions.

The political uncertainty is a 2024 business threat that can seriously affect international trade. It can pause relationships between clients and companies, resulting in severe financial loss. The political risks can affect more than just direct trade; they can affect the supply chain process and even affect the economy of various regions.

Even if a business does not directly deal with international products, your partners or suppliers may affect every company in a chain process. The 2024 business threat can lead to uncertainty and a large amount of financial loss.

Trade credit insurance is again the perfect policy to deal with the financial loss of political risks. The insurance will help cover the loss of most financial disruptions due to political issues.

Changing Consumer Preferences

Customers are vital for many businesses that provide products and services. These companies constantly analyse customer behaviour to understand what the customers need and want to grow. Customer behaviour change can be a serious 2024 business threat if a company is unaware of it.

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The new generation of customers is more aware of the environment, public affairs, humanity and the overall brand image. In 2024, more customers will buy from only eco-friendly and ethical brands. A company will lose many customers this year if a product or service is unethical or environmentally harmful. Companies must embrace being sustainable, ethical and improve their brand image for a better future. 

In addition, customers can test a company’s liability and sue them if they believe the product or service has harmed them. Companies must be ready for liability lawsuits in 2024.

The best liability protection is a range of liability insurance. The liability insurance can include director and officer, professional indemnity, product liability and public liability insurance. All these insurance will cover the business or professional in case of liability risks in 2024. Companies may need different combinations of the four, but every business needs at least two, depending on the industry.

Talent Shortage

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Employees are crucial to helping a company grow and succeed. Many companies are constantly hiring to fill new roles to reach new business targets. Unfortunately, a 2024 business threat is the lack of qualified talent in various industries. 

Some industries will struggle to hire the right employees for specific roles. In fact, according to the Manpower group research, 75 % of employers globally report finding it hard to fill positions.

Therefore, companies in 2024 must ensure they are patient when finding new employees and understand talent shortage statistics in their industry. In addition, the talent shortage makes retaining current employees critical.

A great way to ensure employees are taken care of at a company is with insurance. Companies should have high-quality employee compensation insurance to adequately cover employees while they are working. Employee compensation insurance will cover the costs related to work injuries—expenses such as medical bills, salary and compensation.

Companies can also provide medical insurance and other employee benefits to ensure they have a higher chance of retaining their employees.

Why Insurance Will Be Crucial to Face These 2024 Business Threats

The above threats are only 5 of the main 2024 business threats, and there may be many more specifically related to different industries. Every company must be aware of these main and additional threats related to their industry. Some threats may not be avoidable, but a company can prepare.

Insurance can prepare the company to deal with most threats. A combination of business insurance is an effective way to deal with the consequences of threats with a minimum financial loss. When a business has the proper insurance, they do not need to panic when hit by a threat and can deal with it professionally with the help of experts.

We all hope the new year is risk-free, but sadly, that’s never the case. The best a company can do is be aware and protected from 2024 business threats.

 

 

To Learn More about various business insurance and get the best coverage for your business in 2o24, contact Red Asia Insurance.