Virtually no company, industry or country is immune to today's unprecedented period of economic unrest, and most insurers have increased their overall preparedness. But less than half the respondents of a study conducted by Aon Corp. reported they are tracking and managing all components of their total cost of insurable risk.
Aon Corp. yesterday announced the results of its 2009 Global Risk Management Survey, which is c. Conducted biannually. Th, the survey charts responses from 551 organizations worldwide in four key areas: top 10 risks, overall risk preparedness, business losses related to risk, and key business topics and functions.
"This survey helps our clients stay abreast of emerging issues, and learn how peers and competitors are managing risks, overcoming challenges and capturing opportunities in order to achieve sustainable growth, continuity and profitability," says Steve McGill, chairman and CEO of Aon Risk Services. "One of the benefits of having an unmatched global network is the ability to leverage Aon's size and scope to create the industry's most comprehensive data reports and better serve our clients."
The top 10 risks according to this year's survey are:
1. Economic Slowdown
2. Regulatory/Legislative Changes
3. Business Interruption
4. Increasing Competition
5. Commodity Price Risk
6. Damage to Reputation
7. Cash Flow/Liquidity Risk
8. Distribution or Supply Chain Failure
9. Third Party Liability
10. Failure to Attract or Retain Top Talent
Compared to 2007's findings, most organizations have increased their overall risk preparedness. However, less than half of survey respondents reported they are tracking and managing all components of their total cost of insurable risk. Also, for three of the top 10 risks (economic slowdown, damage to reputation and regulatory/legislative changes), less than two-thirds of respondents indicated they have formally reviewed the risk, or have a plan in place.
Aon says the survey results indicate that virtually no company, industry or country is immune to today's unprecedented period of economic unrest. While reputation risk fell from the top position in the 2007 survey, the importance of the threat is not diminished. Reputation risks impact the public's perception of the quality, integrity and intention of an organization, influence a partner or customer's decision to do business with a firm and may affect a government or regulator's decision to allow a company's actions.
Regulations and legislation, Aon says, are now perceived as the second-greatest risk factors facing business. While it remains unclear as to whether more stringent regulations are expected to expand to the majority of industry sectors, Aon believes an increase in regulation within the financial sector is widely anticipated. For multinational organizations, the cost, quantity and complexity of regulations presents serious compliance challenges.
"While these complex risks carry with them a degree of unpredictability that may impact an entire enterprise, they are in fact manageable," says Stephen Cross, CEO of Aon Global Risk Consulting. "Those organizations prepared to capture opportunity will lead the way out of the economic downturn with robust and proven risk management strategies in place, and clear objectives set for future success."
Register or login for access to this item and much more
All Digital Insurance content is archived after seven days.
Community members receive:
- All recent and archived articles
- Conference offers and updates
- A full menu of enewsletter options
- Web seminars, white papers, ebooks
Already have an account? Log In
Don't have an account? Register for Free Unlimited Access