Anyone in the business of risk management will tell you it'simpossible to be 100% prepared. Risks are constantly evolvingin new and unpredictable ways. As risk managers consider how bestto mitigate and insure risks, it is important to understand wherethey are exposed and to what.
|The 2018 issue of Aon Risk Solution's Terrorism andPolitical Violence Risk Map does just that, highlighting manyof the complexities faced around the globe. The risks analyzed— terrorism, political violence and political risk — are fluid andever-changing. Drawn on insights from their partners, The RiskAdvisory Group and Continuum Economics, the maps and theirunderlying analysis address some of the most pressing issues in thecrisis management space.
|2018 is far from over, and neither are the risks. Being asprepared as possible can make all the difference. With this inmind, here are some key takeaways from the 2018 Risk Maps.
|Related: NU's Risk manager choice awards: Who'stalking?
|Tourism takes a hit
The tourism industry is highly sensitive to terrorism risk. Amajor attack can have an immediate impact on travel patterns, andattacks that do not directly target the industry can also have asubstantial indirect impact on tourism revenue.
|Just last year, Las Vegas experienced one of the worst massshootings in modern U.S. history; cancellations at a number of LasVegas properties surged soon afterward. Insurance executivespredicted the insurance industry would have to pay more than$1 billion as a result.
|Of the 44 global attacks to occur in 2017, 20 took place inhotels, according to The Risk Advisory Group. Risk Advisoryand Aon TerrorismTracker data indicates that more than 80% of allterrorism-related fatalities in Western countries last yearoccurred in locations where tourists are likely to gather —including hotels, airport, public spaces and entertainmentvenues.
|Related: How businesses can prepare for activeshooters
|Grounded
It's not great to time to be in aviation. Aon reports thatcompanies are finding themselves with increasing exposures to airline failure andstate intervention, especially as calls for more fuel-efficientaircraft rise.
In the past, aviation leasing typically focused on European andNorth American airlines, with the predominant exposure being toinsolvency risks; the expansion of fleets into other parts of theworld — Africa and Asia, in particular — has added anincreasingly political dimension to lessors' and financiers' riskexposures as political risk and intervention is higher in theseregions.
|Related: Southwest jet engine blows out in flight, killingone passenger
|Other key figures
- Overall political violence risk levels worldwide increased forthe third year in a row, with 17 countries receiving increased riskratings and only six receiving reduced risk ratings.
- Forty percent of countries are assessed as being exposed toterrorism and sabotage risks.
- Eight percent of all terrorist incidents in 2018 targetedbusinesses. Roughly 75% of these targeted oil and gas, mining,transport, construction, and critical infrastructure. The rest weredirected at retail, media, finance and tourism.
Working in risk management requires constant vigilance, andAon's latest report can help insurance professionals in a number offields. As risks around the globe rise, insurance professionalsneed to stay ahead of the curve and avoid playing catch up.
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