Global Risks

The Global Risks Report (From World Economic Forum)

The Global Risks Network produces a number of regional and topical reports, along with its flagship publication, The Global Risk Report, released annually ahead of the World Economic Forum’s Annual Meeting in Davos. The Global Risks Report is the result of a collaboration with Strategic Partners of the Forum: Citigroup, Marsh & McLennan Companies (MMC), Swiss Re, Zurich Financial Services; and Wharton School Risk Center. It discusses changes occurring in the global risks landscape from year to year and identifies those global risks that are set to play a critical role in the upcoming year. The report also explores the interconnectedness of risks, and considers how the strategies for the mitigation of global risks might be structured. Its conclusions are the result of various workshops and discussions facilitated by the Global Risks Network and involving its partners, but also other business, academic, think tank and government stakeholders.

Top Five Risks by Likelihood and Impact

The world is more at risk as persistent economic weakness saps our ability to tackle environmental challenges, according to the World Economic Forum’s Global Risks 2013 report. This is one of the key findings of a survey of over 1000 experts from industry, government and academia, who were polled on how they expect 50 global risks to play out over the next ten years. The results fed into an analysis of three major risk cases: Testing Economic and Environmental Resilience, Digital Wildfires in a Hyperconnected World and The Dangers of Hubris on Human Health. The report also includes a special chapter on resilience as well as a section on “X Factors” – emerging concerns with unknown consequences. The report highlights the need for new thinking and concerted action on a number of issues, as illustrated by the emergence of new, systemic, global risks. These include financial risks, food security, supply chain vulnerability and energy risks.

Global Risks Report

Global Risk Management Survey (GRMS).

The report unveiled the top 50 risks as well as hidden risks facing organisations today:

1 Economic slowdown / slow recovery

2 Regulatory / legislative changes

3 Increasing competition

4 Damage to reputation / brand

5 Failure to attract or retain top talent

6 Failure to innovate / meet customer needs

7 Business interruption

8 Commodity price risk

9 Cash flow / liquidity risk

10 Political risk / uncertainties

11 Exchange rate fluctuation

12 Technology failure / system failure

13 Third-party liability

14 Distribution or supply chain failure

15 Capital availability / credit risk

16 Weather / natural disasters

17 Property damage

18 Computer crime / hacking / viruses / malicious codes

19 Growing burden and consequences of corporate governance / compliance

20 Counter party credit risk

21 Lack of technology / infrastructure to support business needs

22 Inadequate succession planning

23 Failure of disaster recovery plan / business continuity plan

24 Crime / theft / fraud / employee dishonesty

25 Injury to workers

26 Workforce shortage

27 Merger / acquisition / restructuring

28 Environmental risk

29 Loss of intellectual property / data

30 Failure to implement or communicate strategy

31 Interest rate fluctuation

32 Globalization / emerging markets

Natural resource scarcity / availability of raw materials

34 Directors & Officers personal liability; Understaffing

36 Product recall

37 Corporate social responsibility / sustainability

38 Climate change

39 Absenteeism

40 Social media

Asset value volatility

42 Share price volatility

43 Unethical behavior

44 Pandemic risk / health crisis

As this is a hot topic and understanding exposure to the current Ebola crisis is under debate we will provide a few points of outside analysis.

45 Outsourcing

46 Terrorism / sabotage

47 Pension scheme funding

48 Sovereign debt

49 Harassment / discrimination; Kidnap and ransom / extortion

AON insurable and uninsurable risks chart