According to a finding by Allianz Italy, Confindustria and Italian Association of Entrepreneurs, the major risks which owners of (SMEs) in Europe face in today’s business world are credit crunches, delay in payments and the effect of financial crisis on global demand.
Among the major European countries, Italian SMEs are suffering the most as they are found lacking risk management expertise. The reports showed that, less than one-third of the Italian companies were well-equipped in areas of risk evaluation, management capabilities and efficient risk management tools.
Surprisingly, Italian industrial sector was also found to be structurally under-insured. As per the data, total insurance premiums in Italy account for only 1 percent of GDP when compared to 3 percent (approx) in Germany and United Kingdom, more than 2 percent in France and 1.8 percent in Spain.
When asked about the possible risks that they would be facing in 2009, 37 percent of them said delayed payments or client defaults as the number one risk, while 20 percent were worried about the credit crunch, rising cost of capital and funding. 16 percent were worried about the lack of orders and global and national demand, due to the impact of financial crisis. Other countries, France, Germany, Great Britain and Spain too, also agreed with Italy in terms of possible risks.
Apart from the above factors, Italy, France, Germany and Spain also feel reputation risk as a critical issue. Compliance risks were quoted by German and Spanish entrepreneurs. Italy, France and Spain feel susceptible to risks on foreign markets.