A Marsh political risk report warns geopolitical shifts are leading to “unprecedented” complexity with implications for businesses.

Business leaders expect global restructuring in the next 12 months but are not dedicating enough time to understanding and preparing for the strategic impacts on their organisations, the broker says.

“Instead, many CEOs continue to focus their planning time primarily on short-term volatility, such as sudden policy changes or unexpected commercial events.

“This contradiction – expecting major changes in geopolitics but not yet investing significantly to understand them – likely stems from multiple factors, including the difficulties of strategic foresight and the demands on leaders’ time to resolve the challenges of the here and now.”

Marsh Pacific political risk and structure credit leader Kyle Williams says it is important for business leaders to have plans for managing political risks.

“It’s one thing for it to be a top concern, but really what the report highlights is the need for clients to react and clients to actually introduce that ongoing analytical framework [and] not to be overwhelmed by the fire hose of news reports,” he told insuranceNEWS.com.au.

“There’s a lot of emotion and emotive content in a lot of the news reports. Obviously, it’s an extremely volatile geopolitical and political global landscape.  

“And so cutting out the noise and understanding what your business’ ... actual underlying exposures are through supply chains, through customers, through regulatory risk, through asset risk, through trade risk, is absolutely vital.”