Aon Global Risk Consulting, has conducted further research to understand more about organisations’ attitudes to the top threats they face in today’s hyper connected world.
With a focus on analytics, Aon wanted to explore further some of the results of its biennial Global Risk Management Survey (GRMS*) published in 2013, so it subsequently asked captive directors (executive and non-executive) for their opinions on the rankings of the top 50 risks identified.
Stephen Cross, Chairman, Aon Centre for Innovation and Analytics, said “We felt that the results from the GRMS 2013 had thrown up some anomalies. With our expertise in the captive space, we approached captive directors for their opinions on the rankings of various risks to give us a more holistic view. As a result, we believe there is a real debate to be had across the risk management industry on insurable versus uninsurable risk. Understanding risk has always been a fact of business life, but today, the magnitude, complexity and speed have increased exponentially. That is why business leaders are concerned with how they manage risk.”
One particular threat that Aon felt was under-rated was Cyber Crime, which was voted as the #18 risk affecting businesses. Overall 83% of captive directors agreed that the #18 ranking was severely or perhaps under-rated.
“Successful business are increasingly using technology to increase sales, maximise efficiency and reduce expenses, but evolving technologies such as cloud computing and social media increase a business’s risk to cyber theft, fraud and sabotage” commented Rory Moloney, CEO of Aon Global Risk Consulting, “I believe the low rating of cyber threat might be due to a lack of ownership as often it’s not clear where this risk rests in an organisation. Also, we still lack data which makes it difficult for the insurance market to respond," he said.
Another area of concern to Aon was the attitude towards terrorism risk, which was ranked #46 in the survey and 52% of captive directors agreed that this threat was ranked too low (62% in the Americas). Aon’s view is that with more incidences of political unrest and terrorist attacks, organisations must not become complacent, as terrorism attacks are not confined to politically or economically unstable regions, and the results are almost always devastating. Aon plans to launch its 2014 Terror Risk Map on 28 January 2014.
Cross said: "Is it a case of 'out of sight, out of mind'? Complacency around risk management is an issue and we need to heighten this issue. We believe risk managers have underrated the risk of terrorism, and the views of expert captive directors concur with our view.”
* Global Risk Management Survey (GRMS) methodology
1,415 respondents (risk managers/CFOs/CEOs) from 70 countries in all regions of the world and from companies of all sizes provided their views on the latest risk trends and priorities companies face.
* Captive Director Research
Given that some of the results of the GRMS surprised Aon, to double check those findings and get a more holistic view of the perception of those threats from an audience with a broad depth of knowledge and global experience, it conducted more research with Captive Directors to gain their insight and perspectives. This resulted in the first research report into the perceived importance of risks as seen by over 100 executive and non-executive captive directors.