Least Risky Industries in the UK in 2021

1. Shipbuilding in the UK

2021 Overall Risk Score: 3.12

Industry operators build military vessels for the Royal Navy and foreign governments. Industry revenue is anticipated to expand at a compound annual rate of 2.4% over the five years through 2021-22 to reach £6.1 billion. This includes revenue growth of 3.1% in the current year. Import competition in the passenger ship segment has remained intense over the past five years due to lower production costs in Europe and Asia. Nevertheless, exports are expected to account for a large share of revenue, at 14.4% in the current year.

Revenue growth at the start of the period was supported by the construction of... Learn More

2. Document Management Services in the UK

2021 Overall Risk Score: 3.35

Industry operators provide outsourced document storage, destruction and digitalisation services to commercial and government clients. Strict data protection regulations and a preference shown by downstream firms to outsource document management services amid rising cost pressures is expected to have supported industry demand in recent years. This trend has been most prominent within the public sector, where departmental budget cuts have forced government departments to downsize their estates and pursue space saving endeavours. Strengthening demand for digitisation services has also supported the industry over the past five years. However, competition from firms specialising in cloud storage, as well as technological developments... Learn More

3. Railway Equipment Manufacturing in the UK

2021 Overall Risk Score: 3.40

The industry relies heavily on long-term rolling stock replacement contracts. These contracts have long lead times and involve periodic payments throughout the manufacturing process, followed by a balloon payment when the project reaches completion. This creates a high level of revenue and profit volatility. Industry revenue is forecast to expand at a compound annual rate of 5.3% over the five years through 2021-22, to reach £2.3 billion. This includes revenue growth of 5.5% of revenue in 2021-22. The industry's performance is heavily dependent on the performance of Alstom Transport and Hitachi, and in 2021-22, these two firms are estimated to... Learn More

4. Machine Tool Wholesaling in the UK

2021 Overall Risk Score: 3.45

The Machine Tool Wholesaling industry supplies a variety of machine tools to the manufacturing, construction, mining and forestry industries, amongst others. There has been some consolidation activity in the industry, with vertical integration of manufacturers and wholesalers diminishing profit margins over the five years through 2021-22. Additionally, the industry has faced low business confidence and a strong depreciation in the value of the pound since the EU referendum result, leading to major markets halting investment plans and rising purchasing costs for operators. This has negatively affected industry performance over the period. However, resilient construction sector and industrial production have limited... Learn More

5. Chemical & Fertiliser Mineral Mining in the UK

2021 Overall Risk Score: 3.47

The Chemical and Fertiliser Mineral Mining industry has been subject to volatile conditions over the past five years. The industry transitioned to the production of polyhalite, which led to a substantial reduction in potash prices and significant revenue decline for much of the past five years. However, production of polyhalite in 2018 has given the industry a new lease of life. Cleveland Potash Ltd, the largest firm in the industry, has transitioned into a polyhalite-only mining business. Industry players were able to continue production despite the COVID-19 (coronavirus) outbreak, with firms implementing social distancing measures and other safety measures to... Learn More

6. Risk & Damage Evaluation in the UK

2021 Overall Risk Score: 3.52

The industry acts as an outsourced claim adjusting and processing service for insurers. The industry also provides services to policyholders in the form of independent third-party validation, or the contesting of evaluations made by assessors employed by the insurers underwriting the policy. Demand for the industry's services is closely aligned with the level of outsourcing insurers opt to undertake, insurance coverage and the occurrence of insured risks that give rise to the need for assessing damage caused and the level of pay-outs. Over the five years through 2021-22, industry revenue is expected to increase at a compound annual rate of... Learn More

7. Reinsurance in the UK

2021 Overall Risk Score: 3.52

Over the five years through 2021-22, industry revenue is anticipated to increase at compound annual rate of 4.5%. Over the past five years, premium income has increased supported by regulatory changes such as Solvency II, changes in the Ogden rate and the implementation of the Data Protection Act 2018. A rising number of natural disasters that have necessitated insurance claims have prompted an increase in premium pricing.

The COVID-19 (coronavirus) pandemic has had a mixed effect on industry performance, with life cover stagnating at the start of 2020-21. Nonetheless, over the year, premium income increased, stemming from higher claims from cyber... Learn More

8. Sports Facilities in the UK

2021 Overall Risk Score: 3.61

Firms within the Sports Facilities industry operate indoor or outdoor sports facilities that are used to carry out the organisation and operation of sports events for professionals, amateurs or the general public. Larger facilities may also be used to host other events such as music concerts. Revenue is generated by the leasing or hiring of facilities from owners or operators. Various sporting events hosted in the United Kingdom over the past five years have helped to boost industry revenue. Revenue rose dramatically in 2015-16 and 2016-17 following the Rio Olympics in 2016, which increased sports participation in the United Kingdom.

Following... Learn More

9. Agricultural Insurance in the UK

2021 Overall Risk Score: 3.63

Over the past five years, operators in the Agricultural Insurance industry have struggled with poor investment returns, volatility in underwriting returns and dampened demand induced by the COVID-19 (coronavirus) outbreak. Additionally, significant damage was caused by natural disasters, particularly flooding, which raised the value of claim pay-outs. Operators have also contended with increasingly stringent regulatory requirements, such as the Solvency II directive. Due to these operating difficulties, smaller companies in the industry have chosen to phase out or end agricultural insurance to focus on higher-margin insurance markets. Industry revenue is expected to decrease at a compound annual rate of 0.1%... Learn More

10. Tour Operators in the UK

2021 Overall Risk Score: 3.64

The Tour Operators industry includes operators that arrange, assemble and conduct tours both domestically and internationally. Tours may incorporate transportation, accommodation, food and visits to select locations or special events. Niche tour operators specialise in certain destinations, activities or experiences. Economic conditions in the United Kingdom have a significant effect on industry demand, as spending on travel and tourism is considered to be a luxury and therefore consumers cut back on this type when finances are constrained.

As a result of consumer confidence declining for the majority of the past five years, industry revenue has been limited, even decreasing over the... Learn More