Business risks today are global, spanning industries as well asborders. According to Aon Risk Solutions, even the most seasonedrisk managers find it a challenge to anticipate and respondeffectively to the increasingly expansive and evolving threats totheir organizations.

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Aon Risk Solutions released its bi-annual 2013 Global RiskManagement Survey, and found that, on average, reported loss ofincome from the top 10 reported risks has increased from 28 percentin 2011 to 42 in 2013, while reported risk readiness has dropped 7percent.

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For the third straight survey, “economic slowdown/slow recovery”has been ranked as the top risk facing organizations, while“political risk/uncertainties” entered the top 10 for the firsttime.

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Conducted in 2012's fourth quarter, the survey gathered inputfrom 1,415 respondents, which represent public and privatecompanies of all sizes around the globe across many industries.

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Click “Next” to see the top 10 risks as reported by the surveyrespondents

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1. Economic Slowdown/Slow Recovery

Since concerns over the world's economy will not go away soon,Aon says organizations need to embrace it for the long-term andfrom a global perspective. We are no longer sitting on an island byourselves. What happens on the other side of the world can have adirect impact on every organization, whether it has internationaloperations or not. For example, during the financial crisis, thedrop in real estate values, record high foreclosure rates anddefault rates on loans in the U.S.triggered a worldwide creditcrisis that affected businesses everywhere, making it harder forthem to obtain loans and expand.

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Therefore, says Aon organizations must plan for this risk bylearning from lessons in the past, stepping out of their day-to-dayoperations and thinking in terms of organizational readiness forthe future.

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Where Each Industry Ranked This Risk

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1st:

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Aviation

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Chemicals

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Conglomerate

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Consumer Goods Manufacturing

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Construction

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Hotels and Hospitality

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Lumber, Furniture, Paper and Packaging

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Machinery and Equipment Manufacturers

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Metal Milling and Manufacturing

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Non-Aviation Transportation Manufacturing

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Non-Aviation Transportation Services

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Professional and Personal Services

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Real Estate

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Rubber, Plastics, Stone and Cement

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Technology

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Wholesale Trade

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2nd:

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Banks

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Government

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Retail Trade

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3rd:

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Educational and Nonprofits

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Healthcare

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Insurance, Investment and Finance

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Pharmaceuticals and Biotechnology

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Telecommunications and Broadcasting

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5th:

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Natural Resources (Oil, Gas and Mining)

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Utilities

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6th:

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Agribusiness

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Food Processing and Distribution

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2. Regulatory/Legislative Changes

Since the financial meltdown in 2009, Aon saysgovernments around the world have stepped up their regulatoryfunctions and are becoming more robust in setting and determiningpolicies for businesses, not simply for the financial sector, butfor industries across the board. While most companies accept theneed for rules to govern business and are accustomed to workingwithin regulatory constraints, the sheer volume and complexity ofthese rules can still be daunting, not to mention the frequencywith which they change.

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Aon notes the irony in regulations — designed to help businessesmitigate risks — being perceived as a key risk factor facingbusinesses. More companies see the increasingly stringentregulations as intrusive and burdensome.

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Where Each Industry Ranked This Risk

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1st:

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Banks

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Government

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Healthcare

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Insurance, Investment and Finance

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Pharmaceuticals and Biotechnology

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Telecommunications and Broadcasting

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Utilities

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2nd:

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Educational and Nonprofits

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Non-Aviation Transportation Services

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Professional and Personal Services

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Real Estate

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3rd:

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Agribusiness

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Natural Resources (Oil, Gas and Mining)

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Non-Aviation Transportation Manufacturing

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4th:

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Aviation

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Wholesale Trade

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5th:

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Lumber, Furniture, Paper and Packaging

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Rubber, Plastics, Stone and Cement

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6th:

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Chemicals

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Construction

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Metal Milling and Manufacturing

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8th:

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Consumer Goods Manufacturing

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Food Processing and Distribution

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Hotels and Hospitality

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Retail Trade

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9th:

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Conglomerate

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Technology

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11th:

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Machinery and Equipment Manufacturers

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3. Increasing Competition

Increased competition has a direct and lastingimpact on earnings, says Aon. At present, a weakened global economymeans that consumers have less disposable income and companies arecompeting for a smaller base of clients with decreased spendingpower. Therefore, increasing competition has made it imperative forcompanies to focus on innovation, brand recognition and productdifferentiation to survive and thrive.

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Where Each Industry Ranked This Risk

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1st:

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Retail Trade

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2nd:

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Aviation

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Conglomerate

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Construction

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Insurance, Investment and Finance

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Pharmaceuticals and Biotechnology

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Rubber, Plastics, Stone and Cement

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Technology

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Telecommunications and Broadcasting

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3rd:

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Hotels and Hospitality

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Non-Aviation Transportation Manufacturing

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Non-Aviation Transportation Services

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Professional and Personal Services

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Wholesale Trade

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4th:

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Chemicals

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Consumer Goods Manufacturing

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Educational and Nonprofits

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Healthcare

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Lumber, Furniture, Paper and Packaging

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Metal Milling and Manufacturing

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5th:

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Banks

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Machinery and Equipment Manufacturers

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6th:

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Agribusiness

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9th:

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Real Estate

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10th:

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Food Processing and Distribution

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14th:

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Natural Resources (Oil, Gas and Mining)

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18th:

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Utilities

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26th:

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Government

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4. Damage to Reputation/Brand

Since reputational events often arrive withlittle or no warning, organizations are forced to respond in realtime and economic losses are mounting. Aon says the unpredictablenature of reputational and brand-related events continues to eludecompanies.

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In the survey, respondents say that losses of income in the last12 months increased dramatically rising from 8 percent in 2011 to40 percent in 2013. The increase could be driven by organizations'improved abilities to identify and measure losses associated withreputational risks, and also by the impact of social media and itsabilities to make any news feed viral.

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Where Each Industry Ranked This Risk

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1st:

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Educational and Nonprofits

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2nd:

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Food Processing and Distribution

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Hotels and Hospitality

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3rd:

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Banks

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Pharmaceuticals and Biotechnology

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Real Estate

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Retail Trade

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4th:

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Aviation

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Conglomerate

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Insurance, Investment and Finance

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5th:

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Healthcare

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Professional and Personal Services

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6th:

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Technology

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7th:

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Telecommunications and Broadcasting

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Consumer Goods Manufacturing

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8th:

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Utilities

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9th:

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Non-Aviation Transportation Manufacturing

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11th:

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Lumber, Furniture, Paper and Packaging

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Natural Resources (Oil, Gas and Mining)

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13th:

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Construction

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Machinery and Equipment Manufacturers

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14th:

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Metal Milling and Manufacturing

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15th:

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Agribusiness

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16th:

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Chemicals

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Government

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Non-Aviation Transportation Services

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17th:

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Wholesale Trade

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21st:

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Rubber, Plastics, Stone and Cement

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5. Failure to Attract or Retain Top Talent

Talent is a scarce commodity, and with theeconomic recovery underway, competition for talent can becomefierce, says Aon. People are looking for companies which are marketleaders and where their expertise will be treasured.

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Overall, Aon says the survey underscores the importance fororganizations to keep attracting and retaining talent a keybusiness strategy. This includes ensuring that leaders set thetone, build relationships, show their commitment to their talentand hold themselves accountable in meaningful ways.

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Where Each Industry Ranked This Risk

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2nd:

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Government

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Healthcare

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3rd:

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Technology

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4th:

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Metal Milling and Manufacturing

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Natural Resources (Oil, Gas and Mining)

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Professional and Personal Services

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5th:

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Educational and Nonprofits

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Lumber, Furniture, Paper and Packaging

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7th:

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Chemicals

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Non-Aviation Transportation Manufacturing

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8th:

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Banks

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Insurance, Investment and Finance

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Pharmaceuticals and Biotechnology

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Telecommunications and Broadcasting

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9th:

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Aviation

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Conglomerate

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Non-Aviation Transportation Services

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Retail Trade

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11th:

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Consumer Goods Manufacturing

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Construction

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Machinery and Equipment Manufacturers

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15th:

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Agribusiness

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16th:

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Food Processing and Distribution

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Utilities

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17th:

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Real Estate

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18th:

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Hotels and Hospitality

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22nd:

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Wholesale Trade

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24th:

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Rubber, Plastics, Stone and Cement

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6. Failure to Innovate/Meet Customer Needs

Oftentimes, says Aon, companies equateinnovation with technological upgrades or massive (and oftencostly) research and development projects, but experts sayinnovation is more about engaging employees at every level to thinkcreatively about the design of powerful futures. To promoteinnovation, companies should foster an innovation culture from theCEO down.

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Innovation often comes from the producer—not from the customer.Aon notes that Henry Ford once said that if he'd asked hiscustomers what they wanted, they would've asked for a fasterhorse.

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Where Each Industry Ranked This Risk

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3rd:

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Aviation

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Technology

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4th:

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Conglomerate

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Government

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Hotels and Hospitality

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Machinery and Equipment Manufacturers

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Non-Aviation Transportation Services

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Retail Trade

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Telecommunications and Broadcasting

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5th:

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Consumer Goods Manufacturing

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Healthcare

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Insurance, Investment and Finance

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6th:

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Educational and Nonprofits

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Pharmaceuticals and Biotechnology

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Professional and Personal Services

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Rubber, Plastics, Stone and Cement

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7th:

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Lumber, Furniture, Paper and Packaging

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8th:

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Agribusiness

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Metal Milling and Manufacturing

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11th:

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Wholesale Trade

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12th:

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Banks

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13th:

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Chemicals

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Food Processing and Distribution

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16th:

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Non-Aviation Transportation Manufacturing

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19th:

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Natural Resources (Oil, Gas and Mining)

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20th:

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Real Estate

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21st:

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Construction

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31st:

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Utilities

7. Business Interruption

While business interruptions typically conjureup the image of major disasters that create havoc and impact wholecommunities, such as hurricanes, earthquakes or terrorist attacks,Aon says businesses cannot ignore those occurring on a smallerscale that might not make it to the headlines—a power outage orwater main break in the immediate area, fire in a room of abuilding, a bomb threat, or a workplace violence incident.

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Due to its unpredictability, Aon says organizations musteffectively address this risk by identifying all potential threatsto their business and evaluating their mitigation options for eachthreat. In addition, organizations also need to consider theircoverage options for non-damage related losses, such as off-siteservice interruptions to utility suppliers, which was a major causeof disruption from Sandy. More and more insurers are now creatingprovisions within policies to limit their exposure to suchoccurrences, which could leave the insured without coverage andfoot the bill for extra expenses.

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Where Each Industry Ranked This Risk

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2nd:

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Metal Milling and Manufacturing

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Utilities

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3rd:

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Lumber, Furniture, Paper and Packaging

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4th:

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Conglomerate

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Retail Trade

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5th:

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Chemicals

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Technology

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6th:

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Consumer Goods Manufacturing

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Food Processing and Distribution

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Insurance, Investment and Finance

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Natural Resources (Oil, Gas and Mining)

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7th:

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Non-Aviation Transportation Manufacturing

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8th:

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Hotels and Hospitality

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Professional and Personal Services

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Rubber, Plastics, Stone and Cement

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Telecommunications and Broadcasting

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9th:

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Machinery and Equipment Manufacturers

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10th:

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Educational and Nonprofits

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11th:

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Healthcare

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12th:

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Non-Aviation Transportation Services

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Pharmaceuticals and Biotechnology

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Real Estate

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13th:

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Government

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17th:

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Agribusiness

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Wholesale Trade

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18th:

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Banks

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21st:

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Aviation

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23rd:

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Construction

8. Commodity Price Risk

Survey respondents indicated they are lessprepared to manage commodity price risk than in Aon's last survey,with nearly 40 percent of companies feeling they are not ready tomanage it in the current business environment.

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However, the percentage of companies experiencing losses fromcommodity prices has decreased 35 percent, from 45 percent in2011.

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The survey results reflect concerns for the strong pricing inseveral markets, including agribusiness, crude oil, and metals,says Aon.

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Where Each Industry Ranked This Risk

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1st:

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Agribusiness

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Food Processing and Distribution

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Natural Resources (Oil, Gas and Mining)

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2nd:

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Chemicals

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Consumer Goods Manufacturing

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Lumber, Furniture, Paper and Packaging

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Machinery and Equipment Manufacturers

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Rubber, Plastics, Stone and Cement

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3rd:

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Metal Milling and Manufacturing

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4th:

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Aviation

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Conglomerate

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Construction

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5th:

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Non-Aviation Transportation Manufacturing

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Wholesale Trade

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7th:

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Utilities

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11th:

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Retail Trade

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12th:

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Non-Aviation Transportation Services

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14th:

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Technology

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15th:

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Hotels and Hospitality

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24th:

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Banks

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27th:

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Pharmaceuticals and Biotechnology

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29th:

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Insurance, Investment and Finance

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Real Estate

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31st:

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Professional and Professional Services

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32nd:

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Educational and Nonprofits

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34th:

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Telecommunications and Broadcasting

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36th:

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Government

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37th:

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Healthcare

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9. Cash Flow/Liquidity Risk

Aon says that although fundamentals forgenerating cash flow have slowly become better on a global level —with the global GDP increasing $12 trillion since 2009 — manyindustries still face challenges driving top line growth.

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Breaking this risk down into subcomponents — an organization'sability to generate cash flow and its ability to access capital —Aon says a clear picture emerges of the general challenges thateach category has posed since 2009.

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Where Each Industry Ranked This Risk

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3rd:

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Construction

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5th:

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Non-Aviation Transportation Manufacturing

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Wholesale Trade

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6th:

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Non-Aviation Transportation Services

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7th:

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Machinery and Equipment Manufacturers

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Professional and Personal Services

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Real Estate

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8th:

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Banks

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Metal Milling and Manufacturing

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9th:

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Aviation

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Conglomerate

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10th:

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Consumer Goods Manufacturing

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Healthcare

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Hotels and Hospitality

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11th:

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Chemicals

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Food Processing and Distribution

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Retail Trade

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Rubber, Plastics, Stone and Cement

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12th:

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Pharmaceuticals and Biotechnology

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Technology

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13th:

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Agribusiness

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Educational and Nonprofits

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Utilities

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15th:

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Telecommunications and Broadcasting

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16th:

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Government

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19th:

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Insurance, Investment and Finance

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Natural Resources (Oil, Gas and Mining)

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20th:

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Lumber, Furniture, Paper and Packaging

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10. Political Risk/Uncertainties

At the end of 2012, Aon says Pew ResearchCenter compiled 600 major news events for that year. Among those,more than half were related to political and militaryconflicts.

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Often, Aon explains, an organization's perception of thepolitical risk associated with a certain location and industry canbe either under- or overestimated. With political risk rising up onthe boardroom agenda, Aon says companies need to consistentlyassess their political and security risks in all the countries andregions in which they operate or transact business.

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Where Each Industry Ranked ThisRisk

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2nd:

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Utilities

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5th:

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Government

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7th:

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Construction

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Educational and Nonprofits

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Natural Resources (Oil, Gas and Mining)

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8th:

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Healthcare

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Rubber, Plastics, Stone and Cement

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Telecommunications and Broadcasting

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9th:

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Aviation

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Conglomerate

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Food Processing and Distribution

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11th:

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Chemicals

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Non-Aviation Transportation Manufacturing

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Non-Aviation Transportation Services

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12th:

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Banks

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Consumer Goods Manufacturing

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Real Estate

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13th:

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Insurance, Investment and Finance

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15th:

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Machinery and Equipment Manufacturers

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Metal Milling and Manufacturing

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17th:

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Lumber, Furniture, Paper and Packaging

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Pharmaceuticals and Biotechnology

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Professional and Personal Services

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19th:

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Wholesale Trade

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21st:

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Agribusiness

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22nd:

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Hotels and Hospitality

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23rd:

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Retail Trade

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24th:

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Technology