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Managing Risk:
Policy changes, geopolitical conflicts, volatile financial markets, and industry disruption. In today’s level of unprecedented change, risk readiness has fallen to its lowest point in over a decade.
Which risks are on the horizon and how are leaders preparing for the unknown?
How To Maximize Performance In Volatile Times
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From geopolitics to the next high-tech revolution, business leaders are navigating through unprecedented change. As the shifts in year-over-year risk rankings
show, managing volatility while maximizing performance is a permanent C-suite priority. Explore the global Top 10 risks uncovered in Aon’s 2019 Global Risk Management Survey.
The Global Top 10 Risks: How would you rank them?
Choose your top risk to reveal its global ranking
Economic
Slowdown /
Slow Recovery
Damage
to Reputation /
Brand
Cash Flow /
Liquidity Risk
Failure to
Innovate / Meet Customer Needs
Cyber Attacks /
Data Breach
Increasing
Competition
Accelerated Rates
of Change
in Market Factors
Regulatory /
Legislative
Changes
Commodity
Price Risk
Business
Interruption
Economic
Slowdown /
Slow Recovery
Damage
to Reputation /
Brand
Accelerated Rates
of Change
in Market Factors
Business
Interruption
Increasing
Competition
Cyber Attacks /
Data Breach
Commodity
Price Risk
Cash Flow /
Liquidity Risk
Failure to
Innovate / Meet Customer Needs
Regulatory /
Legislative
Changes
Economic Slowdown / Slow Recovery
Top 10 risks
1
Damage to Reputation / Brand
2
Accelerated Rates of Change in Market Factors
3
Business Interruption
4
Increasing Competition
5
Cyber Attacks / Data Breach
6
Commodity Price Risk
7
Cash Flow / Liquidity Risk
8
Failure to Innovate / Meet Customer Needs
9
Regulatory / Legislative Changes
10
Click to learn more about each risk
6. cyber attacks / data breach
Cyber risk retains its number one ranking in North America and becomes risk managers’ top concern.
There’s no argument that technology generates greater opportunities for businesses – but it also creates bigger risks.
According to the Ponemon Institute, the global average cost of a data breach in 2018 is up 6.4 percent over the previous year - to
$3.86 million.
The risk of cyber attacks / data breach first appeared in the Top 10 in 2015. And, as these headline - grabbing figures increase over time, the risk is projected to rise even higher in the next three years.
When we break it down by industries, banks, government agencies, health care, insurance and technology companies consider cyber attacks / data breaches as a number one risk. These industries hold personally identifiable information or rely heavily on digital advances to improve operational efficiency and increase their competitiveness – and tend to be the most targeted for an attack.
Average cost
of a data breach
$3.86
million
=
1. Economic Slowdown / Slow Recovery
Economic Slowdown/Slow Recovery emerges as the number one risk
for organizations.
At the height of the global financial crisis a decade ago, this risk was number one. Fast forward to 2019 and it’s back in the top spot. This time - it’s connected to accelerated rates of change in market factors, globalization, and geopolitical uncertainty.
From trade wars to escalating geopolitical risks, economic slowdown surfaces as a top risk around the world – and across industries. Because of the cut in capital spending during an economic slowdown, businesses in construction, rubber, plastics, stone and cement, machinery
and equipment manufacturing sectors
also rank economic slowdown/recovery
as a number one risk.
The C-suite, particularly CEOs and CFOs, selected Economic Slowdown as their top risk.
Economic Slowdown / Slow Recovery
1
2. Damage to Reputation / Brand
Damage to reputation and brand can come from anywhere.
Every business faces the risk of a reputation event that cuts to the core of how their company is perceived. And the combination of our 24/7 news cycle with widespread use of social media puts brands at risk and has long-term negative consequences, both in public perception and in the marketplace.
Among the C-suite, Chief Counsels selected this risk as their top one- up three spots from 2017. This is likely due to the detrimental impact on brand stemming from various reputation events.
Due to the intangible and uninsurable nature of this risk, companies tend to underrate it. However, studies show a direct correlation between a hit to a company’s reputation and shareholder value. While brand and reputation can be considered intangible - a reputational crisis can have a substantial impact on a company’s financial future.
The interconnected nature of this risk has it in the top five spot across four regions. It is particularly acute in Asia Pacific, where it is the number one risk.
Reputation events
as costly for companies since rise of social media.
Source: Pentland Analytics with Aon plc.
3. Accelerated Rates of Change in Market Factors
The increased speed in the way we do business has led to lowest level
of risk readiness in 12 years.
Companies are finding it harder and harder to predict how market factors can impact business operations – thanks in part to the speed of change
in the global economy and greater connectivity. Risk transfer is also made all the more difficult when some of these risks are uninsurable.
The appearance of this risk in this year’s Top 10 highlights the constantly changing business environment − and the evolving roles of risk managers and insurance markets.
4. Business Interruption
The impact of natural disasters and cyber attacks push Business Interruption risk further up the Top 10.
Large-scale natural disasters such as hurricanes, typhoons, and wildfires, not only devastate local communities - but also cause ripple effects across increasingly global supply chains.
In addition to natural disasters and cyber attacks, geopolitics – from political unrest to sanctions - can cripple operations, including the cancellation of contracts
and threaten overall business continuity.
2017’s NotPetya cyber attack is a reminder of the convergence of the digital and physical world. The digital attack demonstrated that global commerce can be impacted with severe financial consequences.
$653
billion
=
the combined economic losses in 2017 and 2018 due to weather - related events.
5. Increasing Competition
Across industries, disruptive technologies and new business models are profoundly transforming business – increasing competition across the board.
The arrival of Industry 4.0 - where a business’s entire operations are connected and operated via the Internet of Things, cloud computing and big data, is reshaping traditional operations – and even replacing
them entirely.
These disruptive innovations can deliver important benefits to businesses and consumers, in terms
of new and better services - and better prices. However, they can also create tremendous challenges, causing a significant shift in profitability.
Since the new model typically offers customers better value at a much lower cost, those clinging to the old business model are in danger of losing ground
with many pushed out of business.
Respondents from the telecommunications sector see increasing competition as a number one risk. This is likely due to a saturated market in which companies have
to aggressively compete to gain market share.
7. Commodity Price Risk
Back in the Top 10 for the first time since 2013, commodity price risk has increased likely driven by increased volatility across the global economy.
Commodity prices have always been subject to the vagaries of the global economy. This time around, fluctuations in the costs of raw materials have been caused by extreme weather conditions, political instability, rising interest rates, the strength of the U.S. dollar, and financial market pressures in some emerging markets. Adding to the uncertainty has been the impact of trade wars between the U.S. and several major economies.
Commodity price risk scored a similarly high ranking (at number five) exactly 10 years ago, when political uncertainty and market volatility, loomed large.
Such similarity illustrates the interconnectedness of commodity price risk with the state of the economy.
Impacting both costs of goods across imports and exports, more than half of industry sectors have commodity price risk listed in their Top 10s.
8. Cash Flow / Liquidity Risk
Another re-entry into the Top 10, Cash Flow/Liquidity Risk’s ranking reflects the increasing economic uncertainty.
The amount of cash and liquidity available to a business is not only connected to the global economy but the number seven risk – commodity prices. Any fluctuations in the cost of raw materials will directly impact an organization’s operational costs – which hits cash flow and liquidity.
On the regulatory front, the high cost of compliance could also contribute to cash flow risks. A report for the U.S. Chamber of Commerce Foundation claims that federal regulations alone are estimated to cost the American economy as much as $1.9 trillion a year in direct costs, lost productivity, and higher prices. In addition, regulatory compliance costs to businesses with 50 employees or fewer are nearly 20 percent higher than the average for all firms.
9. Failure to Innovate / Meet Customer Needs
Companies struggle with the pace of change in today’s digital economy and many don’t know how to effectively meet customer needs.
The increasing pace of change – and the latest technological developments − mean that not only are new products and services being developed but there are now new ways of delivering and consuming them. All this piles the pressure on an organization to innovate and meet evolving customer needs efficiently.
This risk is projected to climb the Top 10 over the next few years – especially as more and more household brand names fall victim to increasing competition and failure to innovate.
Risk #9
10. Regulatory / Legislative Changes
Despite the increased regulatory clampdown on emerging industries such as technology, this risk has dropped considerably from the number two spot just a decade ago.
Despite certain industries, such as power and utilities, highlighting this risk as number one globally, the risk has dropped in the rankings to number 10.
The slide in ranking is likely to be driven
by the recent deregulation efforts of pro-business politicians in many parts of the world, such as the U.S., the U.K., Australia, Brazil, Hungary, Italy, Poland and Spain.
During these calamities, business interruption
accounts for a much higher proportion of the overall loss.
twice
2009
2011
2013
2015
2017
2019
2
4
6
8
10
Risk Level
Companies may not be seeing regulation as a top risk but this does not mean that they are ignoring it all together. In fact, it’s become an important part of their competitive strategy. Organizations are now viewing regulation as an opportunity to create a competitive advantage over their peers.
Regulatory / Legislative Changes
10
Failure to Innovate / Meet Customer Needs
9
Cash Flow / Liquidity Risk
8
Commodity Price Risk
7
Cyber Attacks / Data Breach
6
Increasing Competition
5
Business Interruption
4
Accelerated Rates of Change in Market Factors
3
Damage to Reputation / Brand
2
Economic Slowdown / Slow Recovery
1
Each part of the world has its own particular set of risks but, as the global economy becomes more connected, the ripple effects of events in one region can quickly impact another.
Use the toggle below to see how different regions view their risks and how those might shift over time.
Around the World, Regions View Risks Differently
Europe
APAC
LatAm
Middle East & Africa
North America
APAC
Europe
LatAm
Middle East & Africa
North America
Companies surveyed in Asia-Pacific consider reputational damage to be a number one risk. This has likely been driven by several major events in the region, including sanction violations and criminal charges against global brands and officers.
Damage to Reputation / Brand
Increasing Competition
Business Interruption
Economic Slowdown / Slow Recovery
Accelerated Rates of Change in Market Factors
Cash Flow / Liquidity Risk
Cyber Attacks / Data Breach
Failure to Innovate / Meet Customer Needs
Regulatory / Legislative Changes
Failure to Attract or Retain Top Talent
apac
1
2
3
4
5
6
7
8
9
10
3-Year Projection
Current
Top 10
Economic Slowdown / Slow Recovery
1
2
Cash Flow / Liquidity Risk
3
Increasing Competition
4
Accelerated Rates of Change in Market Factors
5
Damage to Reputation / Brand
6
Cyber Attacks / Data Breach
7
Failure to Innovate / Meet Customer Needs
8
Commodity Price Risk
9
Failure to Attract or Retain Top Talent
10
Business Interruption
3-Year Projection
Current
Top 10
north america
Cyber Attacks / Data Breach
1
2
Damage to Reputation / Brand
3
Economic Slowdown / Slow Recovery
4
Failure to Innovate / Meet Customer Needs
5
Business Interruption
6
Failure to Attract or Retain Top Talent
7
Increasing Competition
8
Regulatory / Legislative Changes
9
Accelerated Rates of Change in Market Factors
10
Distribution or Supply Chain Failure
3 Year
Projection
Current
Top 10
Cyber Attacks / Data Breach
1
2
Failure to Innovate / Meet Customer Needs
3
Failure to Attract or Retain Top Talent
4
Economic Slowdown / Slow Recovery
5
Aging Workforce & Related Health Issues
6
Accelerated Rates of Change in Market Factors
7
Workforce Shortage
8
Increasing Competition
9
Disruptive Technologies
10
Damage to Reputation / Brand
3 Year
Projection
Current
Top 10
Europe
Accelerated Rates of Change in Market Factors
1
2
Economic Slowdown / Slow Recovery
3
Commodity Price Risk
4
Damage to Reputation / Brand
5
Business Interruption
6
Increasing Competition
7
Cash Flow / Liquidity Risk
8
Cyber Attacks / Data Breach
9
Failure to Innovate / Meet Customer Needs
10
Regulatory / Legislative Changes
3 Year
Projection
Current
Top 10
Accelerated Rates of Change in Market Factors
1
2
Economic Slowdown / Slow Recovery
3
Commodity Price Risk
4
Cyber Attacks / Data Breach
5
Increasing Competition
6
Business Interruption
7
Cash Flow / Liquidity Risk
8
Disruptive Technologies
9
Capital Availability / Credit Risk
10
Failure to Innovate / Meet Customer Needs
3 Year
Projection
Current
Top 10
LATAM
Economic Slowdown / Slow Recovery
1
2
Business Interruption
3
Accelerated Rates of Change in Market Factors
4
Damage to Reputation / Brand
5
Commodity Price Risk
6
Cash Flow / Liquidity Risk
7
Regulatory / Legislative Changes
8
Distribution or Supply Chain Failure
9
Increasing Competition
10
Capital Availability / Credit Risk
3 Year
Projection
Current
Top 10
Accelerated Rates of Change in Market Factors
1
2
Commodity Price Risk
3
Economic Slowdown / Slow Recovery
4
Cash Flow / Liquidity Risk
5
Business Interruption
6
Cyber Attacks / Data Breach
7
Increasing Competition
8
Capital Availability / Credit Risk
9
Exchange Rate Fluctuation
10
Failure to Innovate / Meet Customer Needs
3 Year
Projection
Current
Top 10
middle east & africa
Economic Slowdown / Slow Recovery
1
2
Exchange Rate Fluctuation
3
Political Risk / Uncertainty
4
Commodity Price Risk
5
Accelerated Rates of Change in Market Factors
6
Business Interruption
7
Cash Flow / Liquidity Risk
8
Cyber Attacks / Data Breach
9
Interest Rate Fluctuation
10
Increasing Competition
3 Year
Projection
Current
Top 10
Economic Slowdown / Slow Recovery
1
2
Cyber Attacks / Data Breach
3
Exchange Rate Fluctuation
4
Commodity Price Risk
5
Political Risk / Uncertainty
6
Cash Flow / Liquidity Risk
7
Business Interruption
8
Failure to Innovate / Meet Customer Needs
9
Capital Availability / Credit Risk
10
Concentration Risk (Product, People, Geography, etc.)
3 Year
Projection
Current
Top 10
From regulations to digital transformation, risks vary across industries. What are the top risks by industry?
Risks by Industry
The unpredictable macro-environment is reflected within the construction industry. As companies face increased uncertainty from issues such as Brexit, ongoing U.S. trade negotiations, and rising geopolitical conflicts in Asia, Latin America and the Middle East, less capital is allocated towards large-scale construction projects. Despite the uncertainty, the sector indicates higher levels of risk readiness
than years prior.
Construction
Technology
Manufacturing
Professional Services
Food, Agri & Bev
Power
Construction
Energy
Financial Institutions
Life Sciences
Aviation
Top risks
Economic Slowdown / Slow Recovery
1
2
Cash Flow / Liquidity Risk
3
Capital Availability / Credit Risk
3-Year Projection
Current
Top 10
Economic Slowdown / Slow Recovery
1
2
Cash Flow / Liquidity Risk
3
Capital Availability / Credit Risk
3-Year Projection
Current
Top 10
98%
of Energy companies* use a captive.
Over a quarter of energy companies utilize captives to manage their risk profile.
Some of the common reasons for captive use include control over terms and conditions of cover being offered, cost efficiency, the tactical use of (re)insurance market pricing capacity, and managing retained risk within a complex organization in a structured way.
Top risks
Commodity Price Risk
1
2
Accelerated Rates of Change in Market Factors
3
Business Interruption
3-Year Projection
Current
Top 10
Commodity Price Risk
1
2
Economic Slowdown / Slow Recovery
3
Accelerated Rates of Change in Market Factors
3-Year Projection
Current
Top 10
Energy
Banks view cyber attacks / data breach as their number one risk.
Banks, government agencies, health care, insurance and technology companies all consider cyber attacks/data breaches as their top risk. This is down to these industries all being entrusted with personally identifiable information and,
in the case of some, access to a client’s financial accounts. As these industries all move towards digital transformation, the connection points for a breach also multiply. This risk is projected to remain the top risk for the industry in three
years’ time.
Top risks
Cyber Attacks / Data Breach
1
2
Damage to Reputation / Brand
3
Capital Availability / Credit Risk
3-Year Projection
Current
Top 10
Cyber Attacks / Data Breach
1
2
Accelerated Rates of Change in Market Factors
3
Economic Slowdown / Slow Recovery
3-Year Projection
Current
Top 10
Financial Institutions
Business Interruption is the number
one risk.
Whether flight delays caused by natural disasters or large-scale cyber breaches halting operations, the aviation industry faces significant exposure to unpredictable external forces that disrupt operations.
Regardless of industry, as cyber risk continues to evolve, risk management teams need to be more actively involved in bridging the gap between technical cyber risk assessment activity and the enterprise risk management framework.
Top risks
Business Interruption
1
2
Economic Slowdown / Slow Recovery
3
Increasing Competition
3-Year Projection
Current
Top 10
Failure to Attract or Retain Top Talent
1
2
Business Interruption
3
Cyber Attacks / Data Breach
3-Year Projection
Current
Top 10
98%
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Life sciences companies project that, in three years’ time, Accelerated Rates of Change in Market Factors will be their top risk. External factors such as regulations, mergers and acquisitions activity, and new market entrants are top of mind for the industry.
Top risks
Damage to Reputation / Brand
1
2
Accelerated Rates of Change in Market Factors
3
Distribution or Supply Chain Failure
3-Year Projection
Current
Top 10
Accelerated Rates of
Change in Market Factors
1
2
Distribution or Supply Chain Failure
3
Disruptive Technologies
3-Year Projection
Current
Top 10
+3
Likely linked to large-scale breaches and various high-profile investigations into
data privacy practices, technology companies have a higher cyber risk ranking than their peer groups.
Top risks
Cyber Attacks / Data Breach
1
2
Disruptive Technologies
3
Failure to Innovate / Meet Customer Needs
3-Year Projection
Current
Top 10
Cyber Attacks / Data Breach
1
2
Disruptive Technologies
3
Accelerated Rates of Change in Market Factors
3-Year Projection
Current
Top 10
Aviation
Life Sciences
Technology
of workers in the manufacturing industry are 45 and older.
The global manufacturing industry is expected to experience a deficit of more than two million workers by 2020.
While economic slowdown is a top risk today, workforce shortage and an aging workforce have emerged as key risk areas within the manufacturing industry.
Top risks
Economic Slowdown / Slow Recovery
1
2
Commodity Price Risk
3
Accelerated Rates of Change in Market Factors
3-Year Projection
Current
Top 10
Economic Slowdown / Slow Recovery
1
2
Commodity Price Risk
3
Accelerated Rates of Change
in Market Factors
3-Year Projection
Current
Top 10
Manufacturing
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Top risks
Damage to Reputation / Brand
1
2
Cyber Attacks / Data Breach
3
Failure to Attract or Retain Top Talent
3-Year Projection
Current
Top 10
Cyber Attacks / Data Breach
1
2
Economic Slowdown / Slow Recovery
3
Failure to Attract or Retain Top Talent
3-Year Projection
Current
Top 10
Professional Services
Commodity Price is the industry’s number one risk.
The agribusiness sector is heavily influenced by fluctuations in global commodity prices, which in turn hits supply and demand of some of the most traded commodities such as wheat, soybeans, and corn. The industry is significantly reliant on natural resources and weather patterns – from crop production to the availability of water.
As commodities are traded in major global currencies, the industry is vulnerable to shifts in pricing – all of which impact the entire food supply chain.
Top risks
Commodity Price Risk
1
2
Damage to Reputation / Brand
3
Business Interruption
3-Year Projection
Current
Top 10
Commodity Price Risk
1
2
Climate Change
3
Accelerated Rates of Change in Market Factors
3-Year Projection
Current
Top 10
Food, Agri & Bev
98%
Regulatory/Legislative Changes are the top risk for this industry.
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Top risks
Regulatory / Legislative Changes
1
2
Business Interruption
3
Accelerated Rates of Change in Market Factors
3-Year Projection
Current
Top 10
Regulatory / Legislative Changes
1
2
Cyber Attacks / Data Breach
3
Business Interruption
3-Year Projection
Current
Top 10
Power
Risks Vary By Industry – Industry Reports Available in 7 Languages
How Does Your Industry Stack Up?
Risk
Risiko
Risque
Rischio
Ryzyko
Riesgo
Risco
English
German
French
Italian
Japanese
Polish
Spanish
Portuguese
Risk
English
Risiko
German
Risque
French
Rischio
Italian
Japanese
Ryzyko
Polish
Riesgo
Spanish
Risco
Portuguese
What unique risks does your industry face? Which risks are on the horizon? How can you turn the vulnerability into an opportunity?
Risk profiles vary across
regions – and industries.
Get risk rankings for over 30 industries
Aon’s 2019 Global Risk Management Survey uncovers the global economic and trade concerns that are causing companies’ risk-readiness to hit an all-time low, impacting the C-suite’s ability to manage volatility and maximize performance. Which risks are on the horizon and how are leaders preparing for the unknown?
How Risk-Ready Is Your Organization?
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Risk #5
In Latin America, experts say the region’s economy has weakened due to a downturn in global trade, elections in many of the region’s countries, and shifting investor sentiment for emerging-market assets. All of these factors have pushed economic slowdown to the overall top risk for the region.
Companies in the Middle East also see economic slowdown as a top threat. Falling oil output, together with restrained government spending, could blight some key economies in the Middle East and North Africa over the coming year, with Saudi Arabia, Kuwait and Oman expected to be hit particularly hard.
Companies surveyed in North America see cyber attacks / data breach as a number one threat. With increased connectivity across systems and devices comes increasingly sophisticated cyber risks. Such vulnerabilities can appear across an organization’s people, operations and supply chain – impacting end consumers and threatening overall business continuity.
Accelerated rates of change and economic factors are Europe’s top two risks - thanks in part to uncertainties surrounding the U.K.’s planned exit from the European Union. Despite Brexit, the European economy is expected to grow for the seventh year in a row at a moderate pace in 2019, with expansion forecast in every member state.
Risks Vary By Industry – Industry Reports Available in 8 Languages
How Does Your Industry Stack Up?
La typologie des risques varie selon les régions et les secteurs.
Quels sont les risques isolés auxquels votre secteur est confronté ? Quels sont les risques à venir ? Comment pouvez transformer la vulnérabilité en opportunité ?
Obtenez le classement des risques dans plus de 30 secteurs
Il profilo di rischio di ogni azienda varia in funzione dell'area geografica e del settore di appartenenza.
Quali sono i rischi che affronta il tuo settore?
Quali sono i rischi che si prospettano nel futuro?
Come si può trasformare la vulnerabilità in opportunità?
Scopri la classifica dei rischi di oltre 30 settori produttivi
Rodzaje zagrożeń różnią się w zależności od regionu – oraz branży.
Z którymi unikalnymi ryzykami musi mierzyć się Państwa branża? Jakie ryzyka czekają na horyzoncie? W jaki sposób możecie Państwo zamienić zagrożenia w biznesową szansę?
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Los perfiles de riesgo varían según las regiones y las industrias.
¿A qué riesgos específicos se enfrenta tu industria? ¿Qué riesgos hay en el panorama?
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Os perfis de risco variam entre regiões e indústrias.
Quais riscos são únicos da sua indústria?
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Obtenha classificações de risco para mais de 30 indústrias
1
Damage to Reputation / Brand
2
Accelerated Rates of Change in Market Factors
3
Business Interruption
4
Increasing Competition
5
Cyber Attacks / Data Breach
6
Commodity Price Risk
7
Cash Flow / Liquidity Risk
8
Failure to Innovate / Meet Customer Needs
9
Regulatory / Legislative Changes
10
RISIKOPROFILE UNTERSCHEIDEN SICH NACH BRANCHE:
Mit welchen besonderen Risiken ist Ihre Branche konfrontiert? Welche Risiken sind zukünftig zu erwarten? Wie lassen sich Schwachstellen in Chancen verwandeln?
Zu den Risiko-Rankings für über 30 Branchen
40%
45%
Higher level of risk readiness* today compared to two years ago.
*Risk readiness related to the global top 10 risks.
+5%
Economic Slowdown / Slow Recovery is the number one risk.
Dip in risk readiness* today compared to two years ago.
*Risk readiness related to the global top 10 risks.
8%
Higher level of risk readiness* today compared to two years ago.
*Risk readiness related to the global top 10 risks.
3%
Higher level of risk readiness* today compared to two years ago.
*Risk readiness related to the global top 10 risks.
2%
Higher level of risk readiness* today compared to two years ago.
*Risk readiness related to the global top 10 risks.
3%
Decline in risk readiness* today compared to
two years ago.
*Risk readiness related to the global top 10 risks.
2%
Dip in risk readiness*
today compared to
two years ago.
*Risk readiness related to the global top 10 risks.
18%
2019
Increase in the completion of cyber risk assessments:
78%
69%
2017
dip in risk readiness** today compared to two years ago.
**Risk readiness related to the global top 10 risks.
9%
50%
While Regulatory / Legislative Changes
has slid down the global rankings, respondents from the power/utilities sector still see it as their top risk. As the industry faces strict rules related to safety, global air and water standards and price reporting, climate change and shifting weather patterns further complicate the regulatory landscape.
As digital transformation continues, organizations will increasingly require "digital-ready" talents, which are often scarce internally and highly competitive to obtain externally. Companies that are unable to match talent needs with the business strategy could run the risk of being outpaced by faster-moving competitors.
Economic Slowdown / Slow Recovery
Regulatory / Legislative Changes
10
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Executive Summary
The C-suite, particularly CEOs and CFOs, selected Economic Slowdown
as their top risk.
#38
#38
#34
#32
#28
#22
#16
#10
#3
#8
#6
#14
The rise of this risk suggests that interconnected factors such as trade policy, regulatory changes, and geopolitical tensions are converging and causing concern to business leaders all over the globe.
As companies look to innovate to stay ahead of the competition, talent - related questions arise: do we have the skillsets needed to transform the business?
According to the Ponemon Institute, the global average cost of a data breach in 2018 is up 6.4 percent over the previous year - to $3.86 million.
45%
Respondents* say that they have a loss of income related to commodity price risk.
Impacting both costs of goods across imports and exports, more than half of industry sectors have commodity price risk listed in their Top 10s.
risk #9
risk #9
risk #8
risk #7
risk #6
risk #5
risk #4
risk #3
*per respondents of Aon’s 2019 Global Risk Management Survey.
26%
Global risk ranking for Loss of Intellectual Property / Data.
34
Risk ranking for Life Sciences, due to extensive investments in R&D.
11
*Risk readiness related to the global top 10 risks.
Nine industry sectors rate failure to attract/retain top talent as a top 10 risk.
#
#
$653
billion
=
The rise of this risk suggests that interconnected factors such as trade policy, regulatory changes, and geopolitical tensions are converging and causing concern to business leaders all over the globe.
suggests that interconnected factors such as trade policy, regulatory changes, and geopolitical tensions are converging and causing concern to business leaders all over the globe.
risk
#38
risk
#38
risk
#38
risk
#38
risk
#38
risk
#38
risk
#38
risk
#38
risk
#38
risk
#38
risk
#38
As companies look to innovate to stay ahead of the competition, talent-related questions arise:
do we have the skillsets needed to transform
the business?
risk
# 38
risk # 9
risk # 9
risk # 9
risk # 9
risk # 9
risk # 9
of Energy companies* use a captive.
*per respondents of Aon’s 2019 Global Risk Management Survey.
26%
Risk ranking for Life Sciences, due to extensive investments in R&D.
11
Global risk ranking for Loss of Intellectual Property / Data.
34
#
#
Nine industry sectors rate failure to attract / retain top talent as a top 10 risk.
Executive Summary
Respondents* say that they have a loss of income related to commodity price risk.
The agribusiness sector is heavily influenced by fluctuations in global commodity prices, which in turn hits supply and demand of some of the most traded commodities such as wheat, soybeans, and corn. The industry is significantly reliant on natural resources and weather patterns – from crop production to the availability of water.
As commodities are traded in major global currencies, the industry is vulnerable to shifts in pricing – all of which impact the entire food supply chain.
Banks, government agencies, health care, insurance and technology companies all consider cyber attacks/data breaches as their top risk. This is down to these industries all being entrusted with personally identifiable information and, in the case of some, access to a client’s financial accounts. As these industries all move towards digital transformation, the connection points for a breach also multiply. This risk is projected to remain the top risk for the industry in three
years’ time.
Source: Aon’s 2018 Weather, Climate & Catastrophe Insight Annual Report
*Respondents to Aon’s 2019 Global Risk Management Survey
This risk is projected to rise to the #3 spot in the next few years
Source: Aon’s 2018 Weather, Climate & Catastrophe Insight Annual Report
*Respondents to Aon’s 2019 Global Risk Management Survey
This risk is projected to rise to the #3 spot in the next few years
Aon’s 2019 Global Risk Management Survey uncovers the global economic and trade concerns that are causing companies’ risk-readiness to hit an all-time low, impacting the C-suite’s ability to manage volatility and maximize performance. Which risks are on the horizon and how are leaders preparing for the unknown?
Rise in ranking for cyber attacks / data breach in Technology
Rise in ranking for cyber attacks / data breach in Technology
+3
vs.
vs.
Each part of the world has its own particular set of risks but, as the global economy becomes more connected, the ripple effects of events in one region can quickly impact another.