Economic and Social Unrest Drive Businesses to Invest in Security

Cybercrime risks have received significant attention recently, but other types of crime continue to be a threat. Amid growing concerns over economic and social unrest, companies are facing elevated crime risks. As a result, many of them are increasing their security investments.

Physical Security Incidents Are Causing Greater Losses

The 2023 World Security Report from Allied Universal found that companies lost $1 trillion due to physical security incidents in 2022. One in four publicly-listed companies reported a drop in their value following a physical security incident in the last year. The report identified economic unrest, social unrest, climate change, war and political instability, pandemics, and disruption to energy supplies as hazards impacting security.

Recent Crime Trends

The question as to whether crime is rising is a difficult one to answer – you’ll receive different responses depending on whom you ask. The Office for National Statistics says total crime in England and Wales decreased in the 12 months ending June 2023. However, certain types of crime increased: computer misuse by 33%, police-recorded robbery offences by 11%, offences involving knives or sharp instruments by 3%, and offences involving firearms by 13%.

UK retailers have also experienced an increase in crime. According to the British Retail Consortium’s Crime Survey 2023, every day more than 850 retail workers experienced violence or abuse in 2021/2022, which is almost twice the rate seen before the pandemic. During this time, crime resulted in losses of £1.76 billion. Reuters says 88 UK retail leaders signed a letter to the interior minister demanding action to stop rising retail crime rates.

Crime has also been a growing issue in other parts of the world. Le Monde says shoplifting has increased in countries including Greece and France. In the U.S., the National Retail Federation says retail crime resulted in losses of $112.1 billion in 2022, up from $93.9 billion in 2021.

Economic Stress May Fuel Crime

To explain the recent increases in retail crime, many people point to high inflation rates that have made necessities unaffordable. The International Monetary Fund says global inflation reached 8.7% in 2022 and fell to 7.0% in 2023. Inflation is not expected to return to target levels before 2025 in most cases.

Inflation has hit many families hard. For example, CNN says U.S. families are spending $709 more per month compared to two years ago.

Social Unrest Is Exacerbating the Problem

Social tensions are also contributing to security risks. In some cases, social unrest and economic stressors go hand in hand. According to Politico, protests over food and fuel increased in 2022, with Europe being especially impacted. For example, protestors in Italy denounced high energy costs, protestors in France rallied against the high cost of living, and those in Spain called for higher wages.

Other protests have been more political in nature. According to the BBC, French police broke up a pro-Palestine demonstration after such protests were banned, whereas ARTnews says Just Stop Oil protestors in England have been found guilty of property destruction. Immigration is another hot topic – Euronews says there were 307 anti-migrant protests in 2022.

Businesses Are Beefing Up Security

Faced with mounting security risks, many businesses are investing in physical securing measures. In the report from Allied Universal, 46% of responding companies said they plan to significantly increase their physical security budgets. The most popular method is to introduce new technology, which 55% of respondents named as a priority. Training staff, optimizing security processes, increasing physical security measures, conducting risk assessments and threat analyses, and meeting compliance and regulatory requirements also rank as high priorities.

Data from the British Security Industry Association shows that security businesses have increased the size of their workforces by 16% since July 2022. The rising demand for security workers contrasts with the overall hiring freezes and job cuts in most industries. In Europe, demand for private security has been growing, according to the International Security Journal, but nearly half of security companies struggle to meet demand due to labour shortages.

Protecting Businesses from Security Threats

Economic and social unrest leading to elevated risk levels is pushing businesses to invest in security, but they should also be thinking about insurance. If you need assistance finding coverage for your clients, Costero Brokers can help. We provide creative solutions for your coverage problems. Contact us.