Survey results reveal risk managers are increasingly worried about disruptions in the geopolitical landscape.
- Meg Green
- December 2019
Although the top risk concern for respondents to a biannual global risk management survey is an economic slowdown, the third risk cited was very interesting, said Anup Seth, managing director, Aon Bermuda. The third risk, which ranked 38 in the last survey, is accelerated change in market factors, he said.
Aon's 2019 Global Risk Management Survey offers the following insight into accelerated change in market factors.
“It shows that the increasing volatility of many interconnected market factors—erratic trade policy (EU/UK, US/China) and regulatory changes, large-scale geopolitical conflicts, frequent financial market turmoil, and rapid technology advancements—is causing a seismic shift in demand and supply, and has substantially affected organizations across every region of the globe. Its appearance also illustrates the fast evolving and sometimes unpredictable key risk concerns facing organizations today.”
Seth spoke with AMBestTV at the Bermuda Captive Conference, held in Southampton, Bermuda.
Aon recently released a global risk management survey. Can you tell us what the big takeaways are?
Aon conducts a global risk management survey once every two years. The key findings coming out of the 2019 survey were economic slowdown is the top risk. We had about 2,600 respondents, and these are risk managers around the world.
The top risk was the economic slowdown. The second top risk was damage to reputation or brand. The third risk was very interesting—it ranked [No. 38] in the last survey, but it's up to No. 3—and that is accelerated change in market forces.
What we mean by that is changes to the geopolitical landscape. Whether it's trade policies, whether it's Brexit, for example, in the U.K., in conjunction with talent changes—the struggle that companies are finding in terms of finding the right talent—and also, advancements in technology.
These are the accelerated market forces, and that risk has come up to No. 3. The other interesting finding is only one out of the top 10 risks is fully insurable. That's the business interruption risk that ranked No. 4 in our survey.
Do you think there will be a move to extend coverage to those other areas? Is that a possibility?
It certainly is, and I think one of the areas that Aon is looking at is not just focusing on the transfer of risk, but actually looking at how we can assess risk, how we can mitigate risk, how we can quantify risk, so we're broadening that risk conversation.
The risk transfer, or the insurability, is certainly important, but it's just one element now of that broader risk conversation.
You also did a survey on cyberrisk. Can you tell us what you found there?
This was a cyber captive survey, and what we found is over the last 12 to 18 months, there has been a significant increase in the premiums that are flowing through captives to incubate cyberrisk.
It's across all industry sectors, but certainly, led by the health care and the energy sectors. I think we will continue to see that trend. It's been a common theme at some of the meetings that I've attended at the conference, around how can companies utilize their captives for cyberrisk, or incubating cyberrisk.