WELCOME TO THE CONTINUITY CENTRAL ARCHIVE SITE

Please note that this is a page from a previous version of Continuity Central and is no longer being updated.

To see the latest business continuity news, jobs and information click here.

Business continuity information

Risk leaders struggling to identify and manage major risks: 2013 Aon Global Risk Management Survey

Risk leaders are struggling to identify and manage the major risks facing their organizations, according to the biannual Aon Global Risk Management Survey from Aon Risk Solutions. The report highlights the top ten 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.

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 ten risks dropped a material seven 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.

Top ten risks:

Risk Description

Risk rank - 2013

Risk rank  -
projected 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 continuity planning.

To register for a copy of the Aon Global Risk Management Survey report as well as participate in the ongoing survey, visit www.aon.com/2013GlobalRisk

•Date: 25th April 2013 • World •Type: Article • Topic: Enterprise risk management

Business Continuity Newsletter Sign up for Continuity Briefing, our weekly roundup of business continuity news. For news as it happens, subscribe to Continuity Central on Twitter.
   

How to advertise How to advertise on Continuity Central.

To submit news stories to Continuity Central, e-mail the editor.

Want an RSS newsfeed for your website? Click here