The top three risks facing UK risk managers are reputational damage, Brexit and cyber attacks, according to Aon’s 2019 Global Risk Management Survey of thousands of risk managers across 60 countries and 33 industries.
In comparison, survey respondents globally ranked economic slowdown as their #1 risk, followed by reputation/ brand as the #2 concern. (See related article published by IJ on April 29). 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 United States, the UK and China, jumped from 38 in the previous global survey to round out the top three concerns on the 2019 list.
“The survey highlights the growing interconnectivity of risk faced by organizations today,” said Julie Page, chief executive officer, Aon UK Ltd., who commented on the survey’s UK findings.
“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,” she added.
“At the same time, business interruption, which is ranked number six in the UK this year, is influenced by several of the top 10 risks, including Brexit, cyber attacks, and economic slowdown,” Page noted.
“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,” she said.
“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.”
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, said Aon.
Companies also placed greater importance on challenges such as a failure to innovate/ meet customer needs and difficulty attracting or retaining top talent, the report indicated.
Despite businesses across the globe facing this period of uncertainty, risk managers are reporting their lowest level of risk readiness in 12 years, said the report.
This is partly because many of the top risks, such as economic slowdown and increasing competition, are uninsurable, said Aon, noting, as a result, that risk managers should 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 organizations from potential volatility.
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