Scienza e Tecnologia
Aon Client Study: Risk Management Must Address Shifting Nature of Business Volatility in Wake of COVID-19 Pandemic
The top 10 risks also strongly reflect the current landscape, namely COVID-19 and its impact on organizations. Amidst a backdrop of challenging market conditions, this is testing the ability of firms to manage volatility and make better decisions. Organizations are shifting their focus from event-based to impact-based risk assessments: for example, business interruption was once seen as a linear risk, but the COVID-19 pandemic has demonstrated how it can affect multiple industries and companies simultaneously and globally.
"The world is a more volatile place and the importance of better decision making has never been greater," said Lambros Lambrou , Aon's CEO of Commercial Risk Solutions. "Long-tail risks are not single events. They're innately interconnected, as we've seen with the COVID-19 pandemic fundamentally changing the way the world works, revealing new risks and re-ordering priorities in the C-suite. A preoccupation with managing these immediate risks may be compromising firms' ability to invest in the risks of tomorrow."
Exacerbated by the COVID-19 pandemic, and highlighting the interconnectivity of risk, the top 10 global risks according to the 2021 Global Risk Management Survey are:
"Historically, risk managers and insurers have learned and made decisions by analyzing data from loss events as they have occurred. This approach must evolve in order to proactively manage emerging exposures such as complex supply chains; we can't rely solely on the past to inform future risks," said Rory Moloney , Chief Operating Officer for Enterprise Clients at Aon. "Several of the top risks identified in this year's survey highlight four key areas of client need we've identified, particularly unmet needs in the form of long-tail risks that are no longer on the horizon. Those risks are on our doorstep. There is an increasing realization of the need to address these 'known unknowns.' As we face unprecedented events, the challenge will be how to best develop solutions to properly prepare for and manage through them."
The report highlights the top 10 risks by industry and region, as well as risk readiness, associated losses and mitigation actions for each of the top 10 risks. In addition, the report includes the predicted top 10 risks in the next three years and Aon's analysis of underrated risks. Highlights of key findings by region and industry include:
The 2021 Global Risk Management Survey also includes a deep dive on key issues, including risk management and assessment techniques, controls and mitigation and key risks underwritten by captives. Additional findings from the survey include:
Conducted every two years since 2007, Aon's Global Risk Management Survey provides data and insights to enable better decision making around risk in an increasingly volatile and complex business environment. The full report is available here.
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Nadine Youssef
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