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Aon reveals top risks facing Australian businesses

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The local economy is the most pressing concern for business leaders, according to Aon’s Australian Risk Survey.

Regulatory and legislative change, brand and image, increasing competition and global economic conditions make up the top five, reflecting “a growing sense of uncertainty”.

People risk and human resources are sixth and seventh respectively, suggesting that while unemployment may be growing, the war for talent continues.

Business interruption and supply chain risk, property damage and corporate governance round out the top 10.

Surprisingly, cyber (16) and terrorism (20) are outside the top 10.

“While only 13% of Australian risk managers identified cyber as a key concern, this business threat is rated very highly in most surveys Aon has conducted in other countries,” the report says. And the “real and present danger” of domestic terror attacks should not be ignored.

Aon questions whether more of the top 10 risks should be insurable.

“Given that we are experiencing a soft insurance market, we believe there is an opportunity for insurers to innovate around these top risk issues and to develop new products for those risks that are currently uninsurable.

“There has never been a better opportunity for insurers to demonstrate what they are prepared to do to generate further premium in the current market.”

Most businesses have coverage for people risk, business interruption and supply chain risk, and property damage.

But Aon says it is not aware of any Australian company having a policy for brand and reputational risk, despite such cover being available.

The survey has been published for 13 years. This year’s is the largest, with 579 individuals from 15 industry sectors participating.