Joi, 14 Decembrie 2023 14:39

Economic Slowdown, Growing Labor Shortages and Cyber Risks, Emerging Risks for the Period Ahead

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According to the findings of the Global Risk Management Survey, the most significant risks in the world include cyber-attacks, business disruption, economic downturn, failure to keep and retain top people, and legislative changes.

“The economic moment in each region affects the perception of risks and the economy. In emerging markets, we face certain risks, while in advanced countries, we face risks related to saturation, the maturity of the economy and workforce, trends that we will most likely perceive in the following years. Although not all risks faced by companies are insurable, there are alternative covers or risk management measures that help us manage their effects”, Eugen Anicescu, CEO of Aon Romania, mentioned.

According to the study, approximately 60% of companies reported readiness for risk mitigation. However, only 17% indicated that they quantified their risks, 28% have a risk management plan, and 16% have evaluated solutions for transferring emerging risks. In this context, 39% of the respondents reported profit declines caused by these risks, the most significant loss in the last ten years and 9% higher than in 2021. The most considerable losses were reported in brand reputation, reaching over 50% in 2023, compared to under 10% in 2021. Another significant increase is seen in raw material shortages, with over 60% of companies reporting a decrease in profit, compared to 50% the previous year.

Previsions for 2026 indicate increased risks associated with the economic slowdown, price volatility, and difficulties in supply chains. Moreover, competition and labor deficits are expected to increase.

“Two of the five risks forecasted for 2026 are related to human capital. The pandemic triggered a big change. Now that it is over, we notice even more volatility in this sector, as the companies had to adapt and integrate beneficial changes in current operations. At the end of the year, the keyword I perceive is integration. If a few years ago we would talk about wellbeing, recruitment, diversity, and inclusion, now, the borders between these topics have blurred so much that a human capital strategy cannot be built without including all these elements", complete Armina Dobrica, Senior Consultant, Wellbeing & Culture.

Climate, intellectual property, and artificial intelligence are the most underappreciated concerns, according to the report. The latter entails both risks and opportunities for multinational corporations. On the one hand, it is projected that AI has the potential to add USD2,6 to USD4tn to the world economy. On the other side, it might lead to legal issues and increase the risks associated with human capital.

“Although this risk was ranked third in Central and Eastern Europe, the reality is different. The average damage in 2022 from a ransomware attack was €4.54 million, and this year, the frequency of attacks increased by 49% in the first two quarters compared to the same period last year. Up to 30,000 cyber attacks are detected in Romania every day, and the most affected industries were pharma, public administration, energy, retail, and transport. These risks can be avoided by implementing specific risk transfer and response preparedness and recovery strategies after such incidents”, Cosmin Neagu, Client Director Aon Romania, concluded.

Aon Romania presented on the 7th of December the results of the study in an online event. The company’s representatives, Eugen Anicescu, CEO of Aon, Adrian Low-Vesa, Head of Health Solutions, Armina Dobrică, Senior Consultant, Wellbeing & Culture, and Cosmin Neagu, Client Director, discussed the emerging risks that companies face.

The Global Risk Management survey is conducted every two years and gathers insight from decision-makers in global companies. This year, as opposed to previous results, the main risk is represented by cyber-attacks. In second place is the risk related to business interruption, predominant during the pandemic when supply chain interruptions caused business disruption to occur for reasons other than usual. Moreover, economic risks are rising, including the economic slowdown and the cost of commodities caused by the rapid evolution in specific sectors and the reconfiguration of the supply chains.


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