BI keeps European risk managers awake at night

Despite global companies reporting increased levels of readiness for traditional risks, growing market volatility and the changing nature of the worldwide risk landscape has led to the highest ever reported loss of business income in 2021, according to insurance broker Aon.

This drop in profit was revealed in the broker’s 2021 Global Risk Management Survey. This gathers input from thousands of risk managers every two years to identify key risks and challenges their organisations are facing.

The 2021 edition surveyed more than 2,300 respondents in 60 countries across 16 industries, including both public and private companies.

According to Aon’s 2021 report, the top 10 global risks are:

1. Cyber attacks or data breaches.
2. Regulatory or legislative changes.
3. Damage to reputation or brand.
4. Increasing competition.
5. Business interruption.
6. Technology or system failure.
7. Failure to innovate or meet customer needs.
8. Data privacy (including GDPR) requirements or non-compliance.
9. Failure to attract or retain top talent.
10. Economic slowdown or slow recovery.

In Europe, risks that ranked particularly highly for companies this year include business interruption and supply chain or distribution failure. Meanwhile, respondents believe commodity price risk or the scarcity of materials will be a future top risk globally.

Across all regions included in the report, the four risks that were consistently flagged by risk managers are cyber attacks and data breaches, business interruption, economic slowdown or slow recovery and regulatory or legislative changes.

Speaking on the findings, Lambros Lambrou, Aon’s chief executive of commercial risk solutions, said: “The world is a more volatile place and the importance of better decision-making has never been greater. 

“Long tail risks are not single events. They’re innately interconnected - as we’ve seen with the Covid-19 pandemic fundamentally changing the way the world works, revealing new risks and reordering priorities in the c-suite.

“A preoccupation with managing these immediate risks may be compromising firms’ ability to invest in the risks of tomorrow.”

Aon’s chief operating officer for enterprise clients Rory Moloney added: “Historically, risk managers and insurers have learned and made decisions by analysing data from loss events as they have occurred.

”This approach must evolve in order to proactively manage emerging exposures such as complex supply chains - we can’t rely solely on the past to inform future risks”.