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 (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
, 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:
- Increasing Competition
- Business Interruption
- Accelerated Rates of Change in Market Factors
- Economic Slowdown / Slow Recovery
- Damage to Reputation / Brand
- Cash Flow / Liquidity Risk
- Cyber Attacks / Data Breach
- Commodity Price Risk
- Political Risk / Uncertainty
- 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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