Insurers have been told they have a vital role to play in driving recovery in Europe as the continents business leaders fear a double dip recession.

Ace Insurance co-sponsored a survey of European business leaders with the Economist Intelligence Unit and found that the potential for a global double dip recession and its impact on trade in Europe, top the list of risks facing businesses..

The survey of over 100 European business leaders revealed nearly 30% see a fall back into recession as the biggest potential risk facing the global economy in the second half of 2010. Other risks facing the global economy cited in the survey included sovereign debt default (19%), market volatility (9%) and a future banking crisis (9%). However, fears of a break-up of theEurozone, prompted by the recent meltdown of the Greek economy, appear to have abated with only 5% of respondents considering it a risk going forward.

However Andrew Kendrick Chairman and CEO of ACE Europe said the insurance industry had a real role to play in the driving recovery and restoring business confidence.

“Regardless of whether we face a further global recession or not, the results of this survey show that firms remain vigilant to the risks they face,” he said. “At a time of economic downturn when risks are heightened, insurance has a pivotal role to play. Insurers and risk managers need to work together to ensure the transfer of these risks from business balance sheets is achieved in the most efficient and effective way.

“Recession also creates the potential for new or emerging risks to evolve. Therefore, it is vital that insurers continue to offer creative and relevant products addressing the needs of buyers to demonstrate the importance of the insurance proposition in difficult economic times.”

The impact of another global financial crash on European businesses could lead to weakened demand for goods and services and the ability of firms to raise capital, according to the business leaders surveyed, who saw these as the two main risk challenges facing businesses over the remainder of 2010. Concerns were also expressed about both market and financial volatility.

The respondents were also asked about how prepared their businesses were to deal with risks. Confidence in their businesses’ abilities to deal with these kinds of risks was very high with 90% expressing the view that their firms would navigate successfully through the risks over the next six months.