Aon survey: Prior to COVID-19, a pandemic / health crisis was not a 'top 10' risk for 82 per cent of firms globally
- 82 per cent of respondents said prior to COVID-19, a pandemic or other major health crisis was not a top 10 risk on their organisation’s risk register
- Prior to COVID-19, 52 per cent of respondents in APAC had a pandemic plan in place, compared with 31 per cent in North America and less than 30 per cent in both EMEA and LATAM
- 80 per cent of survey respondents said the pandemic has taught them to take an enterprise-wide approach to incident management, collaborating across functional units including risk, HR, IT and finance
Sydney, 4 February 2021 - Aon (NYSE:AON), the leading global professional services firm providing a broad range of risk, retirement and health solutions, today released a global survey, Reprioritizing Risk and Resilience For a Post-COVID-19 Future, finding that COVID-19 has shown that it will be imperative for businesses to reprioritise risk and to innovate and explore new risk management strategies.
Aon’s global report finds that 82 per cent of respondents said, prior to COVID-19, a pandemic or other major health crisis was not a top 10 risk on their organisation’s risk register. At the time of Aon’s Global Risk Management Survey in 2019, pandemic risk was ranked 60 out of 69 identified risks. Enterprise risk management strategies and management teams were therefore unable to rapidly respond to the threat of the pandemic and, when it hit, their risk infrastructure struggled to cope with the initial response.
Aon’s report identified differences in how businesses have responded regionally; prior to COVID-19, 52 per cent of respondents in APAC had a pandemic plan in place, compared with 31 per cent in North America and less than 30 per cent in both EMEA and LATAM. Organisations in APAC were supported by state-run track-and-trace technology and had built more robust pandemic programs in response to similar threats already faced, such as SARS and the swine flu. The survey found that across all industries and regions, protecting people and assets was a top priority for participants.
Fluctuating pandemic infection rates within regions are influencing which stage businesses find themselves in (‘react and respond’, ‘recovery’ and ‘reshape’). For example, North America has the highest proportion of organisations in the ‘recovery’ phase (59 per cent), while APAC organisations reported they were in the ‘reshape’ phase in higher numbers than the benchmark (36 per cent of APAC organisations compared with 29 per cent overall), likely because of their experience in the progression of the pandemic. Despite these differences, one core theme emerged: more than half of companies report that they expect COVID-19 will continue to impact their business a year from now.
Jennifer Richards, Managing Director – Specialties at Aon in Australia said: “There is no question that the COVID-19 pandemic will change the way companies operate forever. Our research shows that protecting people and assets emerged as a top concern, with many companies focused on well-being, operational resilience and the retention of key people. There is also a clear need to build a more integrated, agile and enterprise-wide risk program, as companies are likely to find gaps in their strategy and in the market. Equally important is that the insurance industry innovates in response to companies’ changing needs, increasing global volatility and emerging risks. Successful insurance solutions in the wake of the pandemic will be more agile, strategic, targeted and scalable.”
Rory Moloney, Chief Executive Officer, Global Risk Consulting, Aon, said: “There is no question that the COVID-19 pandemic will permanently change the way companies operate. There is a long way to go before we are in the ‘post-COVID era’, but as we move towards a recovery phase, companies must now ask what risk management and resilience should look like going forward. Among the top priorities for companies seeking to reshape their business are the new and accelerated use of technology, redeploying resources, workforce planning and rethinking the future of work—this is only the beginning of a much more long-term evolution in risk management.”
The global report highlighted that a critical part of reacting and responding to crisis, and building a successful enterprise risk management strategy, will be in ensuring that the workforce is able to adapt, communicate and collaborate when a crisis strikes. The increased dependency that organisations have placed on digital platforms is making them potentially vulnerable to adverse cyber events, information loss and reputational impacts on a new scale, and will require a refresh of cyber and risk management strategy.