6 Insights to Build Risk Resilience in a Volatile Retail Market

6 Insights to Build Risk Resilience in a Volatile Retail Market
November 10, 2025 9 mins

6 Insights to Build Risk Resilience in a Volatile Retail Market

Retail Risk Reset: 6 Insights to Build Resilience in a Volatile Market

Retailers in North America are navigating intense competition, shifting consumer demands and rising costs. Add to that a wave of evolving risks — from cyber to litigation — and the pressure mounts. These six insights can help retailers rethink their risk strategy.

Key Takeaways
  1. Retailers face significant and connected risk headwinds that impact every part of their business.
  2. Traditional risk strategies aren’t keeping up with today’s pace of change.
  3. Retail leaders can take practical steps to strengthen resilience — by rethinking risk ownership, adapting to market shifts and embedding smarter strategies across the organization.

Risk has always been part of retail — but today, it’s moving faster, spanning across business areas and demanding broader leadership attention. From tariffs and nuclear verdicts to geopolitical shifts and AI disruption, the complexity is growing.

Traditional risk strategies can no longer solely address the wide variety of risks across an organization. Retail leaders are being called to reframe how risk is understood, owned and acted on — across strategy, operations and culture.

“Retailers are challenged with rising costs and low margins,” says MaryAnne Burke, Managing Director, National Retail Practice Leader in the United States. “At Aon’s 2025 Retail Symposium we heard about their challenge to be creative and strategic, but that it all comes down to reducing costs, reducing claim activity, enhancing loss control and claims advocacy.”

These six key risk areas offer actionable insights to help retailers develop an enhanced corporate risk strategy that delivers resilience and manages volatility:

1. The New Risk Landscape: What CEOs and CFOs Need to Know

Top Current Risks Facing Retailers:

North American retailers face many complex and volatile risks that threaten their operations. These are some of the leading risk concerns identified by retail business and risk leaders in Aon’s Retail Top Concerns survey:

  • Cyber attacks and data breaches (ransomware, malware, denial-of-service attacks, social engineering)
  • Litigation and nuclear verdicts (social inflation, class actions)
  • Reputation and brand damage (social media, crisis response, product recalls)
  • Commodity price risk and supply chain disruptions (global instability, nearshoring)
  • AI adoption and operational transformation (automation, data privacy, compliance)
  • Geopolitical volatility (trade wars, sanctions, conflicts)
  • Inflation and cost management (rising costs, margin pressures)
  • Active shooter and security concerns (physical security, crisis management)
Emerging Risks on the Horizon:
  • Acceleration of AI-driven change (regulation, workforce displacement)
  • ESG and climate impacts (regulatory compliance, reputational risk)
  • Regulatory and legal shifts (privacy laws, wage and hour, biometric regulation)
Actionable Insights:
  1. Establish a regular, cross-functional risk review process to identify and prioritize both current and emerging threats.
  2. Use industry benchmarking and scenario planning to understand how these risks could impact your organization’s operations, reputation and financial performance.
  3. Encourage leaders to challenge assumptions and update risk registers quarterly to stay ahead of new developments.

Learn more: Aon 2025 Global Risk Management Survey

Top Risks Confronting Retailers

Global Risk Management Survey Retail Findings

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2. Insurance Market Trends: How to Manage Evolving Risk Pricing

Market Softening or Moderating in Many Lines:

Much of the commercial risk marketplace is in the midst of softening market conditions, including property, cyber, directors & officers and some specialty lines. Conversely, casualty, including commercial auto, workers compensation, general liability and umbrella are in challenging to moderating conditions.

  • Claims severity and litigation costs continue to rise, especially in casualty lines, driven by nuclear verdicts and litigation funding.
  • Insurer appetite is shifting: Underwriters continue to evaluate and adjust their strategies in casualty lines. High-risk classes, large exposures and companies with adverse loss experience may face higher rates or limited capacity. The long-term view of property risk is increasingly volatile and complex as well.
Actionable Insights:
  1. Review your insurance program structure in light of current market trends and your organization’s risk profile.
  2. Where soft pricing currently exists in your program, redeploy premium savings to build long-term resilience, including parametric to target specific triggers such as Cyber Monday, Black Friday and windstorm events.
  3. Assess whether your retentions, limits and coverage terms are still appropriate, and consider alternative risk transfer solutions to build resilience and gain access to capital.
  4. Proactively partner with your insurance broker to ensure your coverage matches your evolving exposures.

Learn more: Aon Global Insurance Market Insights, Q2 2025

3. AI Transformation: Opportunity and Risk in Retail

Workforce and Operational Impact:

Macroeconomic pressures, rising costs, inflation and supply chain disruption are pushing retailers to rethink how they operate. AI offers new ways to streamline processes and boost efficiency — but it also introduces new risks that must be managed.

  • AI will increasingly automate traditional roles (cashiers, inventory, customer service, security)
  • Reskilling and talent strategy are critical to adapt and thrive (job loss backlash, morale and productivity impacts)
  • Customer experience risks will emerge (loss of personal touch, errors in customer handling, accessibility issues)
  • AI-related ethical, legal and reputational risks confront retailers (bias, privacy, compliance, consumer trust)
Actionable Insights:
  1. Evaluate the impact of AI across your workforce and operations.
  2. Identify roles most likely to be affected and develop a strategy for reskilling and redeploying talent.
  3. Review your data privacy and risk management frameworks to address new ethical and compliance challenges.
  4. Foster a culture of responsible AI use and continuous learning.

Learn more: Navigating AI-Related Risks: A Guide for Directors and Officers

4. Litigation and Nuclear Verdicts: Protecting Your Organization

Rise of Nuclear Verdicts:

Nuclear verdicts — litigation exceeding $10 million — are rising, driven by an aggressive plaintiff’s bar, public perception toward large organizations and third-party litigation funding, including hedge funds and foreign governments. Juries increasingly view large verdicts as a tool to motivate corporate change.

  • Common causes in retail include product liability, premises liability and social inflation risks.
  • Higher verdicts lead to more expensive insurance premiums and can make it harder to secure adequate limits.
  • Claim severity is impacting retailers’ ability to meet Wall Street’s earnings targets.1
  • States and sectors most affected include Florida, New York and California, as well as retail and transportation.

Looking ahead, if left unchecked, nuclear verdicts will lead to escalating insurance costs, increased financial strain on insurers and discourage businesses from taking necessary risks.

“Retailers are worried they could be next,” adds Burke. “Boards and insurers are watching closely. The casualty market can’t sustain this trend – it needs a solution.”

Employment Practices and Wage and Hour Risks:
  • Friction points in EPLI coverage (notice triggers, consent to settle, punitive damages)
  • Hot topics: pay transparency, biometric data, AI in HR, aging workforce, wage and hour class actions
Actionable Insights:
  1. Regularly review your litigation exposure and employment practices with legal and risk professionals. Recognize potential triggers within your facilities that could lead to claims, and how to manage a claim should one occur.
  2. Conduct scenario-based stress tests to assess preparedness for high-severity claims and evolving jury attitudes. For example, consider hiring a jury consultant and “overpreparing” expert witnesses where appropriate.
  3. Review safety programs periodically to confirm risks are identified and practices are being followed, especially those related to automobile and premises liability.
  4. Ensure policies and training address emerging risks such as pay transparency, biometric data and AI in HR. Update coverage terms where necessary.
  5. After a claim occurs: Work with your broker and use all resources to manage your claim. Your broker will recommend the best attorney to guide you through the process, including immediate settlement strategies, if an injury occurs.

Learn more: 5 Top Trends for Risk Capital in 2025

5. Workforce Demographics: Managing the Aging Labor Force

Claims Severity and Return-to-Work Challenges:

In Canada, one in seven workers is older than 65.2 In the U.S., that figure is 7.1% — and it’s rising fast. By 2033, the number of workers aged 65 to 74 is expected to grow by 22.4%, and those older than 75 by nearly 80%, according to the Bureau of Labor Statistics.3 Further, claimant age directly correlates with higher claim costs, increased workdays and lower closure rates.

“The whole dynamic of the aging workforce is coming to a head,” adds Burke. “It is costing more money to keep older workers safe and motivated. It is a delicate balance that involves loss control, claims management and a sound program design.”

Adds Rob Connery, Senior Consultant, Retail Thought Leadership for Aon Global Risk Consulting in the United States: “It is imperative that you have a safe workplace from an aging workforce perspective. That means you need to quantify the physical requirements to actually perform the job, followed by safety and ergonomics strategies that drive workplace risk reduction that will allow older workers to work safely.”

  • Between 2020 and 2024, workers aged 60 and older saw the highest increase in overall new claim volume. Their average indemnity duration is nine days longer than younger workers and costs 35% more in both income replacement and medical costs.4
  • Comorbidities (diabetes, hypertension, obesity) further compound risk. General sprains and overuse injuries increase with an aging workforce.
  • Workplace lighting and safety programs should be addressed and updated to accommodate aging workers.
Actionable Insights:
  1. Use workforce analytics to identify trends and risk factors among aging employees.
  2. Invest in targeted wellness and safety programs that address common health and ergonomic challenges.
  3. Benchmark your outcomes against industry peers and set measurable goals for improving return-to-work rates and reducing claims costs.

Learn more: Building Sustainable Performance in a Multi-Generational Workforce

6. Benchmarking and Analytics: Leveraging Data for Better Decisions

Loss Cost Trends and Peer Comparisons:

Risk analytics are helping retailers negotiate better renewals and build more resilient programs. Aon clients use the suite of risk analyzers to capture exposure and loss data, sharing it with underwriters. The tools help risk leaders apply past loss knowledge to future decisions.

  • Benchmarking in workers compensation, auto and general liability identifies key trends and outliers.
  • Subgroup analysis (by retail type, geography, operations) enables targeted risk strategies.
Actionable Insight:
  1. Leverage benchmarking and analytics to gain a clear picture of your organization’s risk performance.
  2. Use data to identify areas for improvement, set strategic priorities and track progress over time.
  3. Make analytics a routine part of leadership decision-making to drive continuous improvement.

Learn more: Power Value-Driven Decision Making with Risk Analyzers

Ready to Build Risk Resilience?

The pace of change in retail risk is accelerating. Forward-thinking leaders who act decisively and strategically, by embedding risk management, leveraging data and fostering resilience, will position their organizations for sustained success. Talk to our team to discuss tailored, actionable approaches for protecting your organization.

Aon’s Thought Leaders
  • MaryAnne Burke
    Managing Director, National Retail Practice Leader, United States
  • Rob Connery
    Senior Consultant, Retail Thought Leadership, Aon Global Risk Consulting, United States

1 Walmart reports rare profit miss, blames higher insurance claims, Financial Post
2 Age-friendly workplaces: Promoting older worker participation, Government of Canada
3 Labor Force Snapshot: Older People in the U.S. Labor Force, SHRM
4 Data shows aging workers driving up comp costs, Business Insurance

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This document is not intended to address any specific situation or to provide legal, regulatory, financial, or other advice. While care has been taken in the production of this document, Aon does not warrant, represent or guarantee the accuracy, adequacy, completeness or fitness for any purpose of the document or any part of it and can accept no liability for any loss incurred in any way by any person who may rely on it. Any recipient shall be responsible for the use to which it puts this document. This document has been compiled using information available to us up to its date of publication and is subject to any qualifications made in the document.

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