Risk readiness has dropped to its lowest level in a dozen years, according to new data from Aon.
Aon’s 2019 Global Risk Management Survey found that economic and global trade concerns are hampering organisations’ ability to invest adequately in risk management. The study surveyed thousands of risk managers across 60 countries and 33 industries.
“Companies of all sizes are struggling to prioritise their risk management efforts amid so much change and uncertainty,” said Rory Moloney, CEO of Global Risk Consulting. “What was once a tried-and-true strategy for risk mitigation – using the past to predict the future – is now a challenge, and coupled with a more competitive global economy, it is causing an all-time low level of risk readiness. As a result, risk management plans need to take a different approach than they have in the past.”
In this year’s survey, respondents ranked economic slowdown as their top concern, with damage to reputation and brand at number two. Accelerated rates of change in market factors stemming from protectionist international trade policies – which was 38th on the list in the last survey – jumped to risk managers’ number-three concern.
Risk managers reported their lowest level of risk readiness in 12 years, as many of the top risks – like economic slowdowns and increased competition – are uninsurable. With that in mind, risk managers should embrace risk management – as opposed to risk transfer – in order to mitigate these threats, Aon said.
“The changes in this year’s survey results indicate that the risk management function must evolve to reach the enterprise level,” Moloney said. “This, combined with the use of data and predictive analytics that can generate actionable insights, will help businesses protect their bottom lines while adapting to accelerated change and economic fluctuations.”
