Aon Survey Finds Risk Managers Feel Exposed to Political Risk

August 8, 2001

Aon Corporation recently conducted a survey revealing that more than 85 percent of Fortune 1000 risk managers indicated that their firm was well-protected from property, general liability and directors’ and officers’ risks. But only 21 percent felt well protected from political risk losses.

Eighty-six percent of respondents indicated that they felt political risk posed a “moderate” or greater threat to their firm. Asked about their firm’s loss experiences, more than a third had experienced transfer risk losses, such as currency inconvertibility or repatriation restrictions. Twenty-four percent had suffered losses from trade risks, such as embargoes, 19 percent from political violence risks and 18 percent from expropriation risks.

According to the survey results, Fortune 1000 firms were particularly concerned with their ability to make systematic assessments of their political risk exposures. Eighty percent of respondents stated that it was “important” or “very important” to use systematic and consistent methodologies to assess political risks. However, only 26 percent reported having achieved this goal.

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