New research by Marsh, the world's leading insurance broker and risk adviser, reveals that British organisations are more concerned during the recession by overseas risks affecting their supply chains and business rather than by threats closer to home.

In its new Business Continuity Management (BCM) survey, Facing an Uncertain Future, Marsh polled 109 UK firms and public sector organisations to establish their attitudes towards and levels of preparedness for key BCM risks such as terrorism, supply chain disruption and economic conditions.

When questioned about outsourcing or off-shoring, 70% of respondents felt there are high levels of risk associated with these activities and 50% of all respondents felt that such risks are not fully understood or actively managed in their organisation. Almost all respondents (94%) were aware of the importance that logistics and storage play in their supply chains, but only 58% were able to identify particular areas of risk.

The survey also revealed that businesses appear to be more worried about a terrorist incident affecting their overseas supply chain than being concerned about the likelihood of terrorist activity in the UK: 65% of businesses are concerned that their supply chains may be affected by terrorism overseas, while 56% of respondents believe that there will be a major terrorist incident on UK soil within the next 18 months.

Martin Caddick, Leader of the Business Continuity Management team at Marsh, remarked: "In tough times, the spectre of unknown or unquantified risks affecting business continuity and subsequently threatening profits looms large. While UK organisations seem relatively aware and prepared for domestic risks, our research highlights that the risks from overseas are often least well-understood, meaning in turn that they can be easily under or over-estimated.

"The perception of overseas terrorism risk illustrates this point: more organisations appear to be worried about a terrorist incident affecting their overseas supply chain than being concerned with terrorism affecting their UK operations. By failing to fully understand their overseas risks, organisations are leaving themselves dangerously exposed to business interruption events."

• Less than one-third of respondents stated that they have altered their levels of risk tolerance as a result of the recession.
• Nearly two-thirds of respondents felt that regulation and red tape is not an issue for their organisation.
• 83% of businesses are aware of the effects of information security breaches and 82% of these feel that they are adequately prepared.