Risk ignorance greatest 2009 challenge: AON Survey

LONDON, 14 January 2009 – 70% of UK risk managers have declared that making sure the employees in their organisation are risk savvy is their biggest challenge in light of new pitfalls according to research conducted by Aon, the leading global provider of risk management services.

The risks companies are facing, such as increased company insolvencies, less access to credit and increased levels of fraud, need to be dealt with by employees throughout the organisation rather than just at senior management levels.

According to the survey of UK businesses the key risk management challenges they face in 2009 are:

Risk management challenge facing UK business in 2009 Percent
Embedding ERM in the culture of the organisation 70%
Keeping ‘risk registers’ real and relevant 47%
Making the link between ERM and strategic planning processes 34%
Gaining senior executive sponsorship 19%
Making business continuity plans relevant to line managers 13%
Credit rating agency scrutiny of ERM 6%

Source: Aon, 2009

Alex Hindson, head of enterprise risk management at Aon Global Risk Consulting comments: “When the markets are literally crashing down around us and we don’t know what is just around the corner it is extremely tempting to focus just on the problems of today, rather than look at the issues and factors that are going to help us survive tomorrow, but this short term view can often be counter-productive. It is essential to look at just where your business might need some extra support, whether it be finding alternate suppliers in case yours goes into liquidation, or re-thinking your insurance programme to suit your changing business model.

“UK organisations have recognised they need to take a close look at just where and how they face risk, yet there is a disconnect out there between knowing you need a plan, having a plan and actually implementing that plan.

“Large businesses, especially, are notorious for creating ‘silos’, or individual parts of the business that do not communicate effectively with each other or share common business objectives. This is perhaps one of the most risk-laden business situations there is. As part of any ERM programme it is vital to break down these barriers so there is a transparent view of the whole business and risks can be assessed properly. Only then can you truly assess the risks facing a company and how you overcome them.

“It is fundamental to get the backing of senior management in creating an ERM programme. If not, there is the risk the programme will be dead in the water. By gaining this type of support, there will be a mandate for change. It is, though, also essential that employees throughout the business understand the who’s, what’s and why’s of the ERM programme. This can be achieved by making the risks you are looking to catalogue and work around or with relevant to each person.”

About Aon

Aon Corporation (NYSE: AOC) is the leading global provider of risk management services, insurance and reinsurance brokerage, and human capital consulting. Through its more than 36,000 colleagues worldwide, Aon readily delivers distinctive client value via innovative and effective risk management and workforce productivity solutions. Our industry-leading global resources, technical expertise and industry knowledge are delivered locally through more than 500 offices in more than 120 countries. Aon was named the world’s best broker by Euromoney magazine’s 2008 Insurance Survey. In 2008, Aon ranked highest on the Business Insurance ranking of the world’s largest insurance brokers based on commercial retail, wholesale, reinsurance and personal lines brokerage revenues. Aon also was ranked by A.M. Best as the number one insurance broker based on brokerage revenues in 2007 and 2008, and was voted best insurance intermediary, best reinsurance intermediary, and best employee benefits consulting firm in 2007 and 2008 by the readers of Business Insurance. http://www.aon.com/.