Business Interruption and Cyber Attacks Identified as Top Concerns in Asia Pacific: Aon Study

SINGAPORE – Media
OutReach – 7 December
2021 – Aon plc (NYSE:
AON), a leading global professional services firm, has announced the results of
its 2021 Global Risk Management Survey,
which gathers input from thousands of risk managers every two years to identify
key risks and challenges their organisations are facing. The past two years
have proved to be incredibly volatile, with the global COVID-19 pandemic having
had a ripple effect across other types of risk, such as heightened awareness of
reputation and cyber, as long-tail risks have become increasingly important to
manage.

The 2021
edition surveyed more than 2,300 respondents in 60 countries/territories across
16 industries at both public and private companies. With more emphasis
and reliance on technology, cyber risk topped the list as the number one
current and predicted future risk globally, its highest rank since the
inception of the survey. Cyber was also cited in the top 10 list of risks
across each region, industry and respondent type. In Asia Pacific, Business
Interruption topped the list, followed by Cyber Attacks.

The top 10 risks also strongly reflect the current
landscape, namely COVID-19 and its impact on organisations amidst a backdrop of
challenging market conditions: slower
vaccine rollouts, delayed infrastructure projects and workforce shortages. This
is testing the ability of firms to manage volatility and make better decisions.
Organisations are shifting their focus from event-based to impact-based risk
assessments: for example, business interruption was once seen as a linear risk,
but the COVID-19 pandemic has demonstrated how it can affect multiple
industries and companies simultaneously and globally.

“The world is a more volatile place and the importance of
better decision making has never been greater, said Lambros Lambrou, CEO of
Commercial Risk Solutions at Aon. “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 re-ordering
priorities in the C-suite. A preoccupation with managing these immediate risks
may be compromising firms’ ability to invest in managing the risks of
tomorrow.”

Exacerbated by the COVID-19 pandemic, and highlighting
the interconnectivity of risk, the top 10 Asia Pacific risks according to the
2021 Global Risk Management Survey are:

1. Business
Interruption

2. Cyber Attacks/Data Breach

3. Economic Slowdown/Slow Recovery

4. Damage to Reputation/Brand

5. Pandemic Risk/Health Crises

6. Failure to Innovate/Meet Customer Needs

7. Increasing Competition

8. Accelerated Rates of Change in Market Factors

9. Failure to Attract or Retain Top Talent

10. Regulatory/Legislative Changes

Additional key
findings for Asia Pacific include:

• Pandemic Risk/Health Crises risk jumped to number
  five in Asia Pacific, up from 59 in the 2019 survey.
• Despite 62 percent of respondents reporting an
  increase in levels of risk readiness, growing volatility and the changing nature
  of the top 10 risks led to the highest ever reported loss of income in Asia Pacific
  compared to other regions.
• In Asia Pacific, 37 percent of respondents
  reported a loss of income from the top 10 risks, an increase of 14 percent
  compared to 2019.
• Seventy percent of
  respondents reported that the Total Cost of Insurable Risk in Asia Pacific was increasing.
• Failure to Attract
  or Retain Top Talent ranked at number nine in 2021, compared to number 10 in
  2019, reinforcing the continued importance of building a resilient workforce.
• Climate change
  ranks at number 21; however, extreme weather events are occurring regularly in
  Asia Pacific. Climate change is inherently tied to other, more tangible risks,
  where the immediate impact is measurable, and is considered an underrated risk
  by Aon.

“Risk profiles have been and continue to change   as
businesses and economies emerge from the pandemic. New exposures have appeared and
therefore our understanding, readiness and ability to manage and transfer risk
must evolve along with them,” said
Anne Corona, CEO, Asia Pacific at Aon. “Several of the top risks identified for
Asia Pacific in this year’s survey highlight
four key areas of client need and the associated interdependencies
of these risks. There is an increasing need to innovate to address these ‘known
unknowns.’ As we face unprecedented events, businesses must proactively prepare
and manage the current and emerging risk exposures.”