These are the findings from Aon’s 11th annual Australasian Risk Survey, which provides a snapshot of the risk management practices of 133 businesses in 19 industries across Australia and New Zealand. The report provides a unique view of the key concerns of some of Australia and New Zealand’s largest and best known organisations – and offers some insights into upcoming business trends.

“What we look for in the survey responses are year-on-year changes that help us understand how business is faring, how it is seeing and responding to a rapidly changing environment and in turn, the kind of help organisations need to better manage their risks,” said Jason Disborough, Managing Director, Global, of Aon Risk Solutions.

The 2013 survey reveals that risk posed by the market environment (economic slowdown), while generally ranked between five and 10, has made its way up seven places in recent years to take equal first place with another risk constant: brand and image.

“This would suggest that despite relatively strong local performance, organisations now see the economy as a greater risk than they did during the GFC and its immediate aftermath,” he said.

“It’s likely that the sheer persistence of the sovereign debt crisis in Europe, slower than expected economic growth in China and India and uncertainty surrounding US fiscal policy is taking its toll. Underpinning this may well be concerns about our economy’s reliance on natural resources and the risk of lessening demand from emerging markets.”

Ranking at equal first position was risk to brand and image, with more than half (56%) of organisations surveyed saying that risk to brand and image had resulted in loss of income in the past 12 months. Technological innovation, the rise of social media and a number of recent well publicised brand scandals suggest that this risk is unlikely to lessen any time soon.

 Hard on the heels of the number one ranking – and potentially contributing to them – is risk relating to regulatory and legislative change. While ranked third overall, it is the number one concern for the banking and finance industry, the healthcare industry and not-for-profits.

“The concern surrounding regulatory change may be based to a large extent on continued political uncertainty with an election on the horizon, along with new legislation such as the Carbon Tax, the Mining and Mineral Resources Rent Tax and the harmonisation of the Occupational Health & Safety (OH&S) laws,” said Mr Disborough.

He also noted that despite the extensive media coverage, the reality is that these changes have, as yet, failed to materially impact the bottom line of most companies surveyed.

A steep rise in concern about business interruption sees it moving up two places to be ranked fourth, which can be attributed to natural disasters both in Australia and New Zealand, notably the Christchurch earthquakes and fires and floods in various Australian states.

“The effects of these disasters have been felt by many businesses, especially in terms of customer impact and there is a real understanding now that there is absolutely no room for apathy about business interruption risk – particularly in relation to supplier management,” said Mr Disborough.

On the human resources front, the survey found that a failure to attract and retain top talent ranked as number five, as it did last year. The skills shortages in many industries combined with cost reductions, significant restructuring and major organisational change, demonstrates that employers recognise the real challenges involved in building and maintaining a team that can effectively further the organisation’s business goals.

In addition to ranking the top five risks, the survey reveals a great deal about businesses’ sense of their operating environment in general. This year, for example, lack of innovation and increased competition made their way into the top 10 for the first time, while political risk and uncertainty was a first-time entrant into the top 20, as was lack of technology infrastructure to support business needs at 14, and failure to implement and/or communicate strategy at 19.

“The survey is an invaluable tool for companies seeking to improve risk management practices by enabling them to compare and contrast their own strategies, costs and management structures with those of their peers,” said Mr Disborough.

“Benchmarking organisational practices against the best in the industry offers a prime basis for improvement.”

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In her new role, Ms Perkins will be responsible for continuing to grow and oversee the strategic direction of the business, and in particular helping client organisations to better understand and manage the important links between wellness, productivity, organisational performance and risk. The People Risk Solutions business is made up of three distinct lines: Health and Benefits; Workers’ Compensation Solutions and Workforce Risk Solutions.

Well recognised as a pivotal member of the Aon team, Ms Perkins is a 25-year veteran in the management of workers’ compensation, human resources and people risk and has been with Aon for the past 13 of them.  In the past eight years, she has played a leadership role as head of Workforce Risk Solutions, and been instrumental in developing Aon’s market-leading Workers’ Compensation and Workforce Risk businesses.

Ms Perkins’ interest lies very much at the innovative end of the people risk spectrum, where she has developed deep expertise in developing preventative solutions that help organisations to keep their employees at work and productive by keeping them healthy, safe and secure. Importantly, she is also a leader in addressing the risks associated with the other side of the coin: reducing and managing negative impacts on both insured and uninsured costs.

Ms Perkins is also the designer of Australia’s first Sick Leave Index, which helps organisations to identify costs and benchmark performance in this area.

“We’re particularly pleased to be able to make this important appointment from our own ranks, with Robyn taking the business to the next level. Robyn not only has extensive experience in delivering strategic advice and assistance regarding workforce and people risk to some of Australia’s largest organisations, she also has a strong personal commitment to what she does and a level of passion and vision for the work that is infectious,” said Steve  Nevett, CEO, Aon Australia.

“Couple that with her deep familiarity with Aon, the strategy and the team, she is clearly the perfect candidate for this position. Her appointment is a testament to the outstanding job she has done for Aon over the past 13 years and I look forward to seeing her delivering in this new and broader role.”

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Each new team member will bring a combination of lengthy experience and specialised expertise to the team.

Former Rio Tinto executive Scott Eccleston is to be appointed Placement Director, Major Projects; former property head from JLT Asia Kevin Hubbard will take on the role of Placement Director, Property, Energy and Mining; and Heath Jose, who brings deep UK experience from London-based firm, Windsor’s, will become the new Placement Manager, Liability.

In his Melbourne-based role, Mr Eccleston will bring the benefit of his 12 years in the risk and insurance department at Rio Tinto to Aon clients. Prior to his recent departure from Rio Tinto he was General Manager Risk Financing.

“Scott is a leading light in mining insurance and has been instrumental in the construction programs for many of Rio’s major developments and mine expansions. As well as his major development and national infrastructure expertise, Scott will provide additional support to the business development initiatives in Global and Corporate, where his industry knowledge and contacts are a genuine differentiator for Aon,” said John Donnelly, Managing Director of Broking and Chief Broking Officer, Pacific, Aon Risk Solutions.

Mr Eccleston commenced his role on 11 February 2013.

Mr Hubbard, who will also be Melbourne-based, is currently the Managing Director of Property for JLT Asia. Prior to this he was specialist property broker in London for more than 30 years.

“Kevin is acknowledged in the London and Singapore markets as one of the preeminent brokers of complex major accounts. His relationships with underwriters in London, Europe and Asia will provide our clients greater international market knowledge and placement expertise than ever before. I have no doubt he will be a fantastic addition to the team,” said Mr Donnelly.

Mr Hubbard will commence his role when he has completed his commitments with his current employer and will be reporting directly to John Donnelly.

Mr Jose, who will be based in Sydney, joins Aon Risk Solutions from Windsor’s in London, where he specialised in London market liability placements for international clients, including those from Australia. The move to Aon signals a return ‘home’ for Mr Hose, who held a position in Aon’s Perth office prior to his UK appointment.

“Heath’s London market experience will provide us with significant insight into that market and our clients will benefit through his extensive market contacts. The fact that we are welcoming back a former team member is an added bonus,” said Mr Donnelly.

Mr Jose will commence his role on 11 March and will be reporting to Bill Pavey, Placement Director Liability.

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