It will be imperative for businesses to reprioritise risk as well as innovate and explore new risk management strategies due to COVID-19, according to an Aon global survey.
In the survey, ‘Reprioritizing risk and resilience for a post-COVID-19 future’, 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.
In 2019 Aon’s Global Risk Management Survey pandemic risk was ranked 60 out of the 69 identified risks.
Aon explains that enterprise risk management strategies and management teams were unable to rapidly respond to the threat of the pandemic, which meant the risk infrastructure of firms struggled to cope with the initial response.
The survey also identifies differences in how businesses have responded regionally; prior to COVID-19, less than 30 per cent of respondents in Europe, the Middle East and Africa (EMEA) had a pandemic plan in place, similar to North America at 31 per cent, but contrasting to 52 per cent of respondents in Asia Pacific (APAC).
Organisations in APAC have built more robust pandemic programmes in response to similar threats already faced, such as SARS and the swine flu, Aon explains.
Across all industries and regions, the survey shows that protecting people and assets was a top priority for participants.
The global report highlights that a critical part of reacting and responding to crisis, and building a successful enterprise risk management strategy, is to ensure that the workforce can 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, which Aon suggests will require a refresh of cyber and risk management strategy.
Aon’s research finds that moving forward, risk and business leaders must broaden their perspective in evaluating major shocks, not just anticipated losses.
Navigating new forms of volatility, building a resilient workforce and rethinking access to capital will all play a role in a companies’ ability to navigate future events, it highlights.
Aon notes that equally, a more cohesive and integrated approach will be necessary to recover not only from the pandemic, but from future shocks.
Of those asked, 80 per cent of global survey respondents report the pandemic has taught them to take an enterprise-wide approach to incident management, collaborating across functional units including risk, human resource, IT and finance.
Commenting on the report, Rory Moloney, CEO, global risk consulting, Aon,says: “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.”
He adds: “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.”
