Survey Finds Economic Slowdown Tops Risk Managers' Concerns

NU Online News Service, April 21, 9:00 a.m. EDT

The economic slowdown tops the list of risk managers' concerns in a biannual survey conducted by Chicago-based insurance broker Aon Corp.

Releasing some of the results of its 2009 Global Risk Management Survey, Aon said the economic slowdown, regulatory and legislative changes, and business interruption were the top three risks of most concern to business leaders today.

The report is based on responses from 551 organizations in 40 countries, representing a broad range of industry sectors from around the world, Aon said.

In Aon's first risk management survey in 2007, damage to reputation was the primary concern of those surveyed. In 2009, the topic slid down to sixth place on the survey.

Among the other issues of concern to risk managers, increasing competition and commodity price risk, new to the survey, come in as the fourth and fifth most important risks in the top ten list.

Cash flow/liquidity risk, also new this year, came in seventh. Distribution or supply chain failure came in eighth. In ninth place was third-party liability, and rounding out the top 10 was failure to attract or retain top talent.

Aon said that compared to findings in 2007, most organizations have increased their overall risk preparedness. However, less than half of survey respondents report they are tracking and managing all components of their total cost of insurable risk.

More importantly, for three of the top ten risks (economic slowdown, damage to reputation and regulatory/legislative changes), less than two-thirds of respondents indicate they have formally reviewed the risk or have a plan in place.

"While these complex risks carry with them a degree of unpredictability that may impact an entire enterprise, they are in fact manageable," Stephen Cross, chief executive officer of Aon Global Risk Consulting, said in a statement.

Mr. Cross added, "Those organizations prepared to capture opportunity will lead the way out of the economic downturn with robust and proven risk management strategies in place and clear objectives set for future success."