It is past time for all of us to start thinking about riskdifferently. The desire and ability to understand and take risk isone of the fundamental drivers behind our global economy. Withoutit, we can't make investments and we can't take the initiativesrequired to succeed.

We tend to only look at the downside of risk. Pick up anewspaper in the morning and you will see the negative issuessurrounding risk. But risk is much more about opportunity. It is,in fact, a requisite. It's a building block for opportunity likealmost nothing else is.

Risk is married to innovation. Risk is married to exploration.Risk is married to expansion.

Think about a very large global pharmaceutical company,domiciled in the United States, which has to decide whether itwants to grow.

Does the firm want to grow in Russia, where it turns out thelocal governments decide to stop payments?

Does it want to grow in Argentina, where the IMF has cancelledtheir loans?

Does it want to grow in Lebanon, where they've decided to stoppayment, as well?

The company has a decision to make–does it want to grow or notgrow? Risk management is at the crux of that argument.

I have focused on two key constituents over the course of my 18months with Aon–my Aon colleagues and about 1,800 clients aroundthe world. I've drawn six observations directly from conversationswith CEOs, CFOs, risk managers and treasurers from Asia, Europe andthe Americas. They are:

I've talked to many CEOs whose companies have gone throughtremendous turmoil because they misunderstood risk. What is it? Howbig is it? What's the priority?

Consider the fact that $300 billion was spent last year in theUnited States alone on risk advice and risk mitigation.

A study by McKinsey & Company revealed that when somethingoccurs, the impact within the first six months is almost 12-timesthe actual event. So, if a $100 million event happens, the impactis over $1 billion in market cap within the first six months.That's a huge penalty when you think about not appropriatelymanaging risk.

Meanwhile, Accenture recently asked 450 CEOs, “What's on yourmind? What are the issues you face every day?” The answersencompassed such things as, “How do we grow the business?” Or,“What do I think of [my] employee capability?” Or, “How should Iexpand in another country?”

Among the issues that CEOs think about every day, number one onthat list was risk.

Think about the biggest events during the last decade. In 1989,the San Francisco Earthquake and Hurricane Hugo were a combined $6billion event.

The two biggest single events in the history of the world upuntil last summer were the tragedy of Sept. 11, 2001, and HurricaneAndrew. They were $20 billion events. Hurricanes Katrina, Wilma andRita last year were a combined $60 billion loss–three times thedifference. The magnitude is absolutely staggering.

Between 1970 and 1990, the average annual catastrophe loss wasaround $3 billion. From 1990 to 2004, it was in excess of $16billion a year. So whether it's terrorism or pandemic or globalwarming, the magnitude of risk is going up.

There were $20 billion in insured losses on 9/11, but the U.S.government last year spent over $500 billion fightingterrorism.

Think about pandemic. We've talked about this with thousands ofour clients over the course of the year. The projected potentialglobal impact of pandemic over a six-month period could be as muchas $200 billion.

What if you were fully prepared for pandemic but nobody elsewas? Your firm would still be affected. What if you've got asupplier in China? You might not be touched, but what if they are?Your firm could then be in trouble. Remember Y2K? What if you spenda few million dollars and nothing happens? This is an incrediblycomplex game.

Hurricane Katrina is still in the headlines more than a yearafter the event. Our top 25 or 30 clients had almost $4 billionworth of claims to resolve, and the complexity was absolutelystunning.

Say you had a $500 million building severely damaged by wind–a$50 million claim. Say it then sustained further damage by thestorm surge–a $50 million claim.

Say it then sustained serious flood in the middle of asweltering summer, and the structure sustained additional damagefrom mold. That's a $500 million loss. But is it covered? Thedifference between yes and no is literally the survival of thecompany.

The CEOs didn't say this, but the risk managers did. It used tobe, you could do this in the corner.

Now, all of a sudden, the CEO wants to know; the board wants toknow; the CFO wants to know; the treasurer wants to know. It's abig deal and the stakes are huge.

Progressive Insurance is an excellent example. Progressivelooked at a body of risk called auto insurance and basically said,“Credit scores are the biggest predictor of whether we're going tohave an automobile accident.” They looked at the same risk thatAllstate and State Farm saw, and saw opportunity.

Between 1986 and 2006, Progressive's share price has grown byroughly 3,000 percent. They've done an unbelievable job of tearingthrough the auto world and gaining ground on two icons–State Farmand Allstate–all because they took a different view of risk.

I believe that behind every great idea is a view on how to thinkabout risk in ways that other people haven't.

Your view on risk has to be managed, and it has to be embraced.If you wait to react, it's too late.

How do you think about risk in your firm, in your company? Is ita big deal, or not a big deal? Is there more upside or downside?How do you manage it? What's the game plan? If you don't have aview, you're losing tremendous opportunity.

In the immortal words of Shakespeare: “Defer no time. Delayshave dangerous ends.”