Aon’s 2019 Global Risk Management Survey – a survey of thousands of risk managers across 60 countries and 33 industries – has revealed that reputational damage, Brexit and cyber-attacks are rated as UK businesses’ top three risks.
In comparison, survey respondents globally ranked economic slowdown as their #1 risk, followed by reputation/ brand as the #2 concern. Accelerated rates of change in market factors stemming from an increase in protectionist international trade policies, including rising regulatory activity and geopolitical tension in countries such as the US, UK, and China, jumped from 38 in the previous survey to round out the top three concerns on the 2019 list.
Top 10 risks for UK businesses
|
Risks
|
Rank
|
|
Damage to Reputation / Brand
|
1
|
|
Impact of Brexit
|
2
|
|
Cyber Attacks / Data Breach
|
3
|
|
Economic Slowdown / Slow Recovery
|
4
|
|
Failure to Innovate / Meet Customer Needs
|
5
|
|
Business Interruption
|
6
|
|
Increasing Competition
|
7
|
|
Cash Flow / Liquidity Risk
|
8
|
|
Accelerated Rates of Change in Market Factors
|
9
|
|
Failure to Attract or Retain Top Talent
|
10
|
Source: Aon
Commenting on the UK findings from the survey, Julie Page – Chief Executive Officer, Aon UK Limited, said: “The survey highlights the growing interconnectivity of risk faced by organisations today. Cyber risk, which is ranked third in the UK, is a major contributor to damage to reputation and brand, which survey respondents in the UK ranked as the number one risk they face. At the same time, business interruption, which is ranked number six in the UK this year, is influenced by several of the top ten risks, including Brexit, cyber-attacks, and economic slowdown.
“The impasse over Brexit has led to unexpected and unpredictable market forces that are creating long-term volatility in the equity and commodity markets, while eroding consumer confidence, hampering investment, and stalling new product development. Therefore, it is not surprising that the impact of Brexit, and the connected risk of a broader economic slowdown, feature as prominent risks for UK companies.”
Economic slowdown the future top risk
When looking at future risks, potential economic slowdown is seen as the #1 future risk for the UK, while the impact of Brexit continues to feature high in businesses’ concerns. Companies also placed greater importance on challenges such as a failure to innovate/ meet customer needs and difficulty attracting or retaining top talent.
Despite businesses across the globe facing this period of uncertainty, risk managers are reporting their lowest level of risk readiness in 12 years. This is partly because many of the top risks, such as economic slowdown and increasing competition, are uninsurable. As a result, Aon recommends that risk managers look to embrace a wider range of risk management tools, as opposed to over-reliance on risk transfer, to mitigate these threats and protect their organisations from potential volatility.
Download the full report – 2019 Global Risk Management Survey.