Cyber risk has become one of the top 10 global threats to businesses for the first time, according to research by Aon Risk Solutions.
The global risk management business said damage to brand and reputation was cited as the top overall concern facing global organisations questioned in its survey. Aon said this further underscored the increasing importance of cyber risk, as it has been regularly linked to brand and reputation issues in the wake of data breaches. Cyber risk itself was the ninth biggest key risk factor.
The Aon Global Risk Management Survey questioned 1,400 chief executives, chief financial offers and risk managers, and said damage to brand and reputation ranked as a top concern across almost all regions and industries, with increasing competition a driving factor.
Property damage re-entered the top 10 global risk list for the first time since 2007, driven in part by unprecedented weather events in recent years combined with the risk of business interruption.
Financial and economic risks including commodity price risk, economic slowdown and technology failure were seen as damaging at senior executive level, with risk managers focused on liability-related risks such as cyber, property damage and third party liability.
Aon Risk Solutions chief innovation officer Stephen Cross said it was no surprise that cyber risk entered the top 10 risks at the same as increasing concern about corporate reputation.
“What is surprising was the lack of alignment between the board and the risk manager,” he said. “Such diverse views illustrate how imperative it is that the board of directors have effective and regular communication with risk managers to effectively assess and mitigate the company’s risk exposure.”
The top 10 risks are:
1. Damage to reputation/brand
2. Economic slowdown/slow recovery
3. Regulatory/legislative changes
4. Increasing competition
5. Failure to attract or retain top talent
6. Failure to innovate/meet customer needs
7. Business interruption
8. Third party liability
9. Cyber risk (computer crime/hacking/ viruses/malicious codes)
10. Property damage
Rory Moloney, chief executive, Aon Global Risk Consulting, said: "While new risks such as cyber have moved to centre stage, established risks like damage to reputation or brand are taking on new dimensions and complexities. The interconnected nature of these risks reinforces the importance of strategic risk management in every organisation."