Cyber crime and terror risks have been severely underrated as major threats affecting businesses in todays hyper-connected world, according to an Aon survey of insurance captive directors
Aon Global Risk Consulting conducted a new survey that assessed organisations' attitudes to top threats in the insurance industry following the results of its biennial report Global risk management survey published last year.
Concerned that the survey underrated cyber crime as a risk, giving it only 18th place in the rankings, Aon polled more than 100 directors to get a more 'holistic' view of industry perceptions.
This found that 83% of captive directors agreed that this ranking was 'severely' or 'perhaps' under-rated.
'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,' said Rory Moloney, chief executive of Aon Global Risk Consulting.
'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.'
Aon also queried attitudes towards terror risk, which was ranked number 46 in the original survey. But the follow-up study found that more than half (52%) of captive directors agreed that this threat was ranked too low.
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, warned Aon.
Stephen Cross, chair of the firm's Centre for Innovation and Analytics, added: 'Is it a case of "out of sight, out of mind?" Complacency around risk management is an issue and we need to heighten this issue. We believe risk managers have underrated the risk of terrorism, and the views of expert captive directors concur with our view.'
He added that there was a need for real debate 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.'