Aon, a founding member of The Risk Institute, released their 2017 Global Risk Management Survey today. Conducted in the fourth quarter of 2016, the bi-annual survey gathered input from 1,843 respondents at public and private companies around the world. It finds that trends in economics, demographics and geopolitics, as well as technology advancements, are transforming traditional risks and adding new urgency and complexity to old challenges.
Top discussion points of the survey include:
- damage to reputation/brand as a top concern
- political risk/uncertainties entering the top 10 risk list
- Cyber Crime ranking the number one risk to North American businesses
- disruptive technologies/innovation predicted to rise in risk
- risk preparedness at its lowest level since 2007
Damage to reputation/brand is consistently the top-ranked risk by businesses. Companies have become vulnerable due to the amplified negative impact social media has on cases of defective products, fraudulent business practices, and corruption.
Cyber Crime is now the top concern among businesses in North America, jumping from number nine to number five on the top risk list. Cyber breaches are increasing and incident response plans have become more complex, making Cyber Crime a costly business interruption.
Political risk/uncertainties have recently re-entered the top 10 risk list at number nine. The survey finds that developed nations that were traditionally associated with political stability are becoming new sources of volatility and uncertainty. Additionally, according to Aon’s latest 2017 Risk Maps, trade protectionism is on the rise while terrorism and political violence ratings are the highest they have been since 2013.
“We are living in a challenging new reality for companies of all sizes around the world. There are many emerging influences that are creating opportunity, but at the same time, creating risks that need to be managed,” said Rory Moloney, chief executive officer for Aon Global Risk Consulting. “As the risk landscape for commerce evolves, businesses can no longer rely solely on traditional risk mitigation or risk transfer tactics. They must take a cross-functional approach to risk management and explore different ways to cope with these new complexities.”
Disruptive technologies/innovation is a concerning risk emerging for the future. It is currently ranked number twenty but is expected to jump to the top ten within a few years. New technologies such as drones, driverless cars, and advanced robotics have caused an increased awareness of impacts for businesses.
The top 10 risks are:
- Damage to reputation/brand
- Economic slowdown/slow recovery
- Increasing competition
- Regulatory/legislative changes
- Cyber crime/hacking/viruses/malicious codes
- Failure to innovate/meet customer needs
- Failure to attract or retain top talent
- Business interruption
- Political risk/uncertainties
- Third party liability (including E&O)
The full report can be accessed at www.aon.com/2017GlobalRisk.