Damage to brand and reputation followed by economic slowdown and business interruption have topped the list of business leader concerns in Australia, according to Aon’s 2019 Global Risk Management Survey.
“In 2017, Australian respondents ranked regulatory and legislative change as the top risk facing local business, something which perhaps reflected the level of change evident at the time in governments at state and federal level,” said Bruce Gordon, managing director for large clients at Aon Australia. “Two years later and despite an upcoming federal election, this risk has receded as a concern to local business, a change which may reflect that business leaders have adapted and accepted accelerated rates of change in political leadership as the new norm.”
Aon said damage to brand and reputation consistently ranked high among the top-of-mind concerns at a local and global level over the last decade.
“Whether it is the threat of cyberattacks or a major project failure, the prevalence of social media and the 24/7 news cycle has the potential to create rapid contagion and this can have an immediate and lasting impact on an organisation’s shareholder value and reputation,” Gordon said.
Emerging as the second highest risk facing Australian organisations and a top risk globally is economic slowdown.
“Despite it being more than a quarter of a century since the last Australian recession, fears for the domestic economy, fuelled by the decline in the property market and electoral uncertainty, have pushed this risk up six places since the 2017 survey,” Gordon said. “The public perception of harm may be an influencer on business beliefs, with concerns as to an economic slowdown acting as a lead rather than a lag indicator.”
Also a rising concern to both Australian and global businesses is business interruption, which has seen a marked rise in significance over the last two years.
“The underlying complexity of regional and global supply chains exacerbate exposure to business and this in turn is reflected in an increased incidence of loss, both insured and uninsured,” Gordon said. “In Australia, it’s easy to understand how headlines addressing devastating drought, bushfires, hailstorms, cyclones, and floods translate into concerns about revenue stream resilience but we see the same elsewhere around the world, with business interruption moving from number eight globally in 2017 to number four in 2019.”
The biennial global risk management survey also listed increasing competition, cyberattacks/data breach, cash flow/liquidity risk, failure to attract or retain top talent, failure to innovate/meet customer needs, regulatory/legislative changes, and accelerated rates of change in market factors as top business risks in Australia.
When considering the exposure of your business to the risk of cyber attacks and data breaches make a call to the team at Austbrokers Terrace. We will be happy to sit down and chat about how we can assist in this area.
Source: Insurance Business Australia
