Global professional services firm, Aon plc released the results of its 2021 Global Risk Management Survey, which gathers input from risk managers across 60 countries and 16 industries, every two years. The survey is designed to identify key risks and challenges companies are facing.
The 2021 survey of 2,300 respondents at both public and private companies found that cyber risk topped the list as the number one current and predicted future risk globally, its highest rank since the survey effort began in 2007. In Canada, the risk of cyber attack or a data breach topped the list of risks organizations are facing, followed by economic slowdown, regulatory and legislative changes, commodity price risk and reputational or brand damage. Further down in the Canadian list, firms say failure to attract or retain top talent, business interruption, pandemic risks and other health crises, increasing competition and supply chain disruption round out the list of top 10 risks.
Impact based risk assessments
Aon adds that COVID-19 is testing the ability of firms to manage volatility and make better decisions. “Organizations 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,” they write.
“The importance of better decision making has never been greater,” adds Joe Peiser, Aon’s commercial risk leader for North America “Long-tail risks are not single events. They’re innately interconnected.”
Canada’s top 10 future risks
He adds that a preoccupation with managing immediate risks may also be compromising firms’ ability to invest in future risks. In Canada, the top 10 future risks are similar to the top 10 current risks, with three new risks identified as being significant in the next three years. At number five, survey respondents say an aging workforce in Canada is a risk, at number eight, capital availability is cited as a concern, followed by corporate social responsibility and environmental, social and governance issues at number 10.
“Historically, risk managers and insurers have learned and made decisions by analyzing data from loss events that have occurred. This approach must evolve,” says Bill Besse, chief client officer, commercial risk solutions in Canada for Aon. “Priorities and approaches need to change in order to proactively manage the uncertainties of potential emerging exposures such as complex supply chains. We can’t rely solely on the past to inform future risks.”
