Aon has announced the results of its 2023 Global Risk Management Survey, which gathered input from almost 3,000 risk managers, c-suite leaders, treasurers, talent professionals and other executives from 61 countries and territories to identify their most pressing business challenges.
Jon Pipe, CEO and principal officer of Aon India Insurance Brokers Private Limited, said, “In a time of rapid change and heightened volatility, finance, risk, people leaders need to come together to understand how these risks are interconnected. The disruptive nature of the Indian business landscape has increased awareness around the need for cyber insurance and business interruption losses. With the use of advanced analytics and integrated Risk Capital and Human Capital capabilities, we are helping clients quantify, manage and match capital to the recognised risks today. We are always innovating on behalf of our clients to serve their future needs.”
The 2023 edition of Aon’s biennial survey found the top business risks in India are cyber attack/data breach, business interruption, and failure to attract or retain top talent. Cyber attack/data breaches has risen from seventh position in the 2021 survey to the number one risk facing Indian businesses. India’s dependency on technology is likely to increase with the widespread adoption of digital infrastructure like the Unified Payments Interface, Aadhaar and Open Network for Digital Commerce. With increasing digitisation, cybercrimes continue to become rampant with costs and complexities associated with such breaches forcing organisations to look at risk mitigation and transfer mechanisms to better manage cyber risks.
Business interruption is ranked number two globally and for India; however, only 16.7 percent of Indian companies have reported suffering a loss as compared to 32.2 percent globally. This shows the robustness of Indian firms to deal with incidents in a quick and seamless approach that minimises the impact of business interruption losses.
The survey further revealed that failure to attract or retain top talent is the third biggest risk facing organisations in India, ranked fourth globally and is predicted to remain the fourth most critical risk by 2026.
Nitin Sethi, chief executive officer of Talent Solutions in India at Aon, said, “As leaders look to the future of their businesses, the risk landscape keeps changing due to the rising geopolitical and macroeconomic volatility. With more than 2x companies reporting a loss due to talent compared to cyber ranked number one, failure to attract/retain top talent can have serious repercussions in a volatile environment. Companies depend on top talent to bring in fresh thinking, new strategies, innovation and creativity — all critical elements to remaining competitive. Data-driven models can highlight the risk of attrition, the impact of engagement and other risk factors of talent loss. There is a compelling need for Indian businesses to therefore leverage advanced data analytics and experts to understand and manage the dynamics of integrated risks.”
The top ten business risks for India, according to the 2023 Global Risk Management Survey, are:
1. Cyber Attack/Data Breach
2. Business Interruption
3. Failure to Attract or Retain Top Talent
4. Failure to Innovate/Meet Customer Needs
5. Property Damage
6. Product Liability/Recall
7. Rapidly Changing Market Trends
8. Supply Chain/Distribution Failure
9. Personal Liability (Directors and Officers)
10. Increasing Competition
Notably, only three of the top five current risks in India are insurable, and less than half of the overall top ten are uninsurable at present.
Though climate change is not featured in the top ten, it directly impacts three of the top ten risks: business interruption, rapidly changing market trends and supply chain/distribution failure. The growing frequency and intensity of extreme weather events in the region increase the risk of business interruption and supply chain/distribution failure considerably, and the rapidly evolving net zero transformation has a myriad of implications for market trends and mandatory climate disclosure across sectors.
The top ten global risks are:
1. Cyber Attack/Data Breach
2. Business Interruption
3. Economic Slowdown/Slow Recovery
4. Failure to Attract or Retain Top Talent
5. Regulatory/Legislative Changes
6. Supply Chain/Distribution Failure
7. Commodity Price Risk/Scarcity of Materials
8. Damage to Reputation/Brand
9. Failure to Innovate/Meet Customer Needs
10. Increasing Competition
Aon’s Global Risk Management Survey is designed to assess business leaders’ attitudes towards risk and risk management in general. Running for the ninth time in 2023, the results from respondents in India show the increasingly interconnected nature of risk, with traditional business risks and people risks converging to create significant challenges for organisations.