Risk readiness drops to lowest level in 12 years

• Aon’s 2019
  Global Risk Management Survey identifies key challenges organisations face in
  assessing and responding to traditional and emerging risks
• Business
  interruption and cyber attacks among the Top 10 risks in Asia �

 

SINGAPORE - Media OutReach - 29 May
2019 - Economic
and global trade concerns are challenging organisations’ ability to invest adequately
in preparing for and protecting the continuity of their operations, according
to Aon’s 2019 Global Risk Management Survey.

Aon plc, the leading global professional services firm providing
a broad range of risk, retirement and health solutions, surveys thousands of risk
managers across 60 countries and 33 industries every two years to identify key
risks and challenges faced by their organisations.

 

Risk managers globally
are reporting their lowest level of risk readiness in 12 years, as many
top risks — including
increasing competition and economic slowdown — remain uninsurable. In
Asia, respondents ranked increasing competition as the No. 1 risk.

  

Business interruption was cited as the No. 2 concern in an
increasingly complex security environment, as ISIS ideology is exported to Asia
inspiring radical actors. The recent attacks in Sri Lanka underscore the point
that tourism-dependent economies in the region can easily become victims of
business interruption and suffer risks related to loss of attraction.

Cyber attacks remain the No. 7 risk as the frequency of
cyber breaches increases. The personal data of over 4,000 individuals, who had
registered their interest in donating blood, was compromised recently after the
Singapore Red Cross website was hacked. Hackers accessed at least 460,000
accounts registered on the shopping websites of Fast Retailing, Asia’s largest
retailer and owner of Uniqlo and GU brands.

The trends toward interconnectivity and interdependency
have made supply chains more vulnerable to cyber attacks. In Asia, which
represents more than one-third of the global contract logistics market, natural
and man-made catastrophes have the potential to disrupt local economies.

“Businesses can no
longer rely on traditional risk mitigation strategies amid increasing
uncertainty, trade policy disputes, and speed of technology change. Instead of
traditional risk transfer, risk managers must embrace robust risk management strategies
to protect their organisations from potential volatility while maximising
growth opportunities,” said Sandeep Malik, CEO, Asia Pacific, Aon.

 

The top 10 risks in Asia are:

1.     Increasing Competition

2.     Business Interruption

3.     Accelerated Rates of Change in Market Factors

4.     Economic Slowdown / Slow Recovery

5.     Damage to Reputation / Brand

6.     Cash Flow / Liquidity Risk

7.     Cyber Attacks / Data Breach

8.     Commodity Price Risk

9.     Political Risk / Uncertainty

10.  Regulatory / Legislative Changes

Participant
profiles in Aon’s 2019 Global Risk Management Survey encompassed small (below
$1B USD), medium ($1B – $15B USD), and large (above $15B) organisations, including
respondents from privately-owned companies, public organisations, government,
and not-for-profit entities. The full report can be accessed at www.aon.com/2019GlobalRisk.

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