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Worrying trend emerges from 2013 Aon Global Risk Management Survey



      Worrying trend emerges from 2013 Aon Global Risk Management Survey

Aon's biannual study unveils top 10 risks for 2013 and projects top 10 risks
for 2016

PR Newswire

LONDON, April 22, 2013

LONDON, April 22, 2013 /PRNewswire/ -- Risk leaders are struggling to identify
and manage the major risks  facing their organizations, according to the
biannual Aon Global Risk Management Survey released today from Aon Risk
Solutions, the global risk management business of Aon plc (NYSE: AON). The
report unveiled the top 10 risks as well as hidden risks facing organizations
today, illustrating the importance of no longer evaluating risk in isolation
but considering the relation of risks to establish and maintain a successful
risk management program.

(Logo:  http://photos.prnewswire.com/prnh/20100719/AQ37264LOGO)

The 2013 Aon Global Risk Management Survey points to a significant decline in
risk readiness among many of the survey respondents. On average, reported
readiness for the top 10 risks dropped a material 7 percent (from 66 to 59
percent) from the 2011 survey and reported loss of income increased 14
percent. Of the 28 industries defined in the report, only three industries –
pharmaceutical and biotechnology, non-aviation transportation manufacturing
and agribusiness – reported the same or improved levels of readiness this
year.

"One possible explanation of the decline in risk readiness could be that the
prolonged economic recovery has strained organizations' resources, thus
hampering the abilities to mitigate many of these risks," said Stephen Cross,
chairman of Aon Global Risk Consulting. "Our survey revealed that, despite
diverse geographies, companies across the globe shared surprisingly similar
views on the risks we are facing today – whether or not they feel prepared."

Aon saw the number of respondents to its latest Global Risk Management Survey
jump to more than 1,400 – a 47 percent increase from its 2011 Global Risk
Management Survey. This indicates that companies continue to have a higher
level of attentiveness to risk management. The 2013 survey ranked the top 50
risks companies face, focusing on the top 10 risks in 2013 and how they may
change in 2016.

Risk Description                        Risk rank -     Risk rank  -projected
                                        2013            2016
Economic slowdown/slow recovery         1               1
Regulatory/legislative changes          2               2
Increasing competition                  3               3
Damage to reputation/brand              4               8
Failure to attract or retain top talent 5               5
Failure to innovate/meet customer needs 6               4
Business interruption                   7               11
Commodity price risk                    8               7
Cash flow/liquidity risk                9               10
Political risk/uncertainties            10              6

Economic slowdown/slow recovery, regulatory/legislative changes and increasing
competition are not surprisingly the top three risks in 2013 and 2016. These
risks also take top spots on the risk rankings for the survey's five main
regions, which include Asia Pacific, Middle East and Africa, Europe, Latin
America and North America. These same three risks are also among the top risks
for 24 of the 28 industries surveyed. This ranking reflects the systemic
nature of these risks and the high interdependence of global economic
activity. 

Political risk/uncertainties broke into the top 10 risks for the first time in
2013. Due to the increasing civil wars and social and political conflicts
around the world, this risk is projected to move up to number six in the 2016
survey. Weather/natural disasters, while not far off the radar at a current
ranking of number 16, is also projected to jump into the top 10 list at number
nine, given the unusual climate patterns worldwide and an unprecedented
increase in natural disasters and weather events. Failure to innovate/meet
customer needs is an increasing priority, projected to jump from number six to
number four in the next three years. Business interruption is expected to drop
out of the top 10 risks due to companies' efforts to improve business recovery
planning.

The 2013 Aon Global Risk Management Survey also uncovered several significant
risks to watch, as these are perceived to be underrated risks. Aon encourages
companies to increase attention on the following:

 
                                                Risk rank - 2013
Risk Description
Computer crimes/hacking/viruses/malicious codes 18
Counter party credit risk                       20
Loss of intellectual property/data              29
Social media                                    40
Pension scheme funding                          47

Javier Gimeno, the Aon Dirk Verbeek chaired professor in international risk
and strategic management at INSEAD, reviewed Aon's survey and added, "As part
of the board's responsibility to endorse and monitor strategy, directors
should gain an intimate understanding of the major strategic risks, possible
scenarios and how the appropriate strategy allows the exploration of
uncertainties and mitigation of strategic risks. Given the results of Aon's
2013 Global Risk Management Survey, developing capabilities for strategic risk
management by top management teams and boards should be an important priority
in these uncertain times."

Risk decision makers are invited to participate in the survey and will receive
a complimentary customized report based on their industry, geography and
revenue size. To register for a copy of the Aon Global Risk Management Survey
report as well as participate in the survey, visit www.aon.com/2013GlobalRisk.

About the Survey
As companies face increasing pressure from stakeholders to save costs and
optimize insurance programs in this post-recession world, the 2013 Aon Global
Risk Management Survey's industry- and geography-specific insights empower
organizations to benchmark their risk management and risk finance practices.
Benchmarking will help identify approaches that may improve the effectiveness
of risk management strategies.

Methodology
Aon Risk Solutions first introduced the Aon Global Risk Management Survey
report in 2007. The 2013 report reflects a survey of 1,415 organizations from
70 countries in all regions of the world, which was conducted in 10 languages
in Q4 2012. The survey is still open to participants. The report was created
to help risk decision makers stay abreast of emerging issues and learn how
their industry and regional peers are managing risks and capturing
opportunities. The web-based biannual survey addressed both qualitative and
quantitative risk issues. Risk managers, CROs, CFOs, treasurers and others
provided feedback and insight on their insurance and risk management choices,
interests and concerns. All responses for individual organizations are kept
confidential; only the consolidated data were incorporated into the report's
findings.

Follow Aon on Twitter:http://www.twitter.com/aon_plc
Sign up for News Alerts: http://aon.mediaroom.com/

Note to editors: Images of the report cover as well as tables and graphs
available upon request

About Aon
Aon plc (NYSE: AON) is the leading global provider of risk management,
insurance and reinsurance brokerage, and human resources solutions and
outsourcing services. Through its more than 65,000 colleagues worldwide, Aon
unites to empower results for clients in over 120 countries via innovative and
effective risk and people solutions and through industry-leading global
resources and technical expertise. Aon has been named repeatedly as the
world's best broker, best insurance intermediary, reinsurance intermediary,
captives manager and best employee benefits consulting firm by multiple
industry sources. Visit www.aon.com for more information on Aon and
www.aon.com/manchesterunited to learn about Aon's global partnership and shirt
sponsorship with Manchester United.

Media Contacts:
Heather Sliwinski                  Allyson Marcus
+1.312.755.3549                    +1.267.994.9052
heather.sliwinski@kemperlesnik.com allyson.marcus@kemperlesnik.com

 

SOURCE Aon plc

Website: http://www.aon.com
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