A survey by Aon has shown that cyber crime and terror risk are under-rated by captive directors.
The research was carried out with the aim of understanding more about organisations’ attitudes to the top threats they face.
With a focus on analytics, Aon further explored some of the results of its biennial global risk management survey published in 2013. The company asked captive directors for their opinions on the rankings of the top 50 risks identified.
Stephen Cross, chairman, Aon centre for innovation and analytics, said: “We felt that the results from the GRMS 2013 had thrown up some anomalies. With our expertise in the captive space, we approached captive directors for their opinions on the rankings of various risks to give us a more holistic view. As a result, we believe there is a real debate to be had across the risk management industry on insurable versus uninsurable risk. Understanding risk has always been a fact of business life, but today, the magnitude, complexity and speed have increased exponentially. That is why business leaders are concerned with how they manage risk.”
Cyber crime was voted as the 18th largest risk affecting businesses. Overall 83 percent of captive directors agreed that this ranking was ‘severely’ or ‘perhaps’ under-rated.
Rory Moloney, CEO of Aon global risk consulting, said: “Successful business are increasingly using technology to increase sales, maximise efficiency and reduce expenses, but evolving technologies such as cloud computing and social media increase a business’s risk to cyber theft, fraud and sabotage. I believe the low rating of cyber threat might be due to a lack of ownership as often it’s not clear where this risk rests in an organisation. Also, we still lack data which makes it difficult for the insurance market to respond.”
Another area of concern to Aon was the attitude towards terrorism risk, which was ranked 46th in the survey. Over 52 percent of captive directors agreed that this threat was ranked too low, and this rises to 62 percent in the Americas.
Aon’s view is that with more incidences of political unrest and terrorist attacks, organisations must not become complacent, as terrorism attacks are not confined to politically or economically unstable regions, and the results are almost always devastating.
