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Introduction Foreword Executive Summary Respondent Profile Top 10 Risks Risk readiness for the Top 10 Risks Losses associated with the Top 10 Risks Identifying, Assessing, Measuring and Managing Risk Measuring TCOR Identifying and assessing major risks Determining limits of insurance Benefits of investing in risk management External drivers for risk management Aons Risk Maturity Index Board Oversight and Involvement Policies on risk oversight and management Approach to risk management at the board level Risk Management Department and Function Chief risk officer Who is handling risk? Where does risk management report? The size of risk management department Claims and safety / risk control roles Third-party service providers Insurance Markets Priorities in choice of insurer Desired changes in the insurance market Risk Financing Changes in premium rates Limits Satisfaction with limit levels Changes in retention level Changes in coverage Global Programs Global insurance purchasing habits Global insurance buying patterns Types of global insurance coverage purchased Captives Organizations that use captives Key risks underwritten Methodology Aon at a Glance Key Contacts
4 6 10 12 18 42 45 50 51 52 55 57 58 59 60 61 64 66 67 68 72 73 74 76 78 79 80 82 83 84 86 88 89 90 91 92 93 94 95 97 99 100 101
Introduction
We are pleased to present the results of the 2011 Aon Global Risk Management Survey, a revealing data-driven study designated to help businesses see a fuller picture of todays risks and risk management strategies. Conducted in Q4, 2010, the Aon Global Risk Management Survey has generated nearly 1,000 responses from companies around the globe. The results are enlightening. For example, as the worlds economy shows signs of recovery from the financial crisis, the threat of economic slowdown still weighs heavily on organizations that have responded to the survey. If the economy continues to improve and businesses grow steadily, organizations will have to plan accordingly to manage changing risk profiles and capture new opportunities brought about by an economic recovery. The findings from this survey allow organizations to benchmark their risk management and risk financing practices and help them identify approaches that may improve the effectiveness of their own risk management strategies. As the worlds leading risk advisor and insurance broker, Aon is committed to using our unmatched global network and insights to provide businesses with industry-leading solutions. If you have any comments or questions about the survey, or wish to discuss the findings further, please contact your Aon account manager or visit aon.com/globalrisksurvey
Best regards,
Foreword
Aon is pleased to share with you the findings of our 2011 Global Risk Management Survey. As you read through the multitude of interesting risk management facts and figures gleaned from nearly 1,000 respondents, it is helpful to think about the events of the last few years that have influenced, or not influenced, the way organizations responded. For starters, consider the events that have occurred since the survey was conducted in Q4, 2010. On February 21, 2011, New Zealand was struck by its second major earthquake in five months, which caused more damage than an even stronger September quake, including 172 fatalities. Eighteen days later on March 11, Japan was devastated by a 9.0 magnitude earthquake and the tsunami that followed. April brought tornadoes to the central and southern regions of the US on a scale unseen in decades, followed by massive flooding. In addition to these natural disasters, the risk events of the last two quarters have included the Middle East uprisings, a second major automobile recall, the WikiLeaks incident and the capture and death of Osama bin Laden. If these events had been current at the time of the survey, we expect that certain risks such as distribution or supply chain failure, business interruption, political risk, damage to reputation and terrorism may have been rated higher on the list of top risks impacting organizations. Now, think about the events the world has witnessed between this survey and our prior survey conducted in Q4 2008, several ongoing and increasing in intensity: Ongoing global recession Ponzi schemes Unemployment and restructuring Government bailouts: Too Big to Fail Financial crises in Ireland, Greece, Portugal and Spain Pension devaluation European and U.S. foreign exchange movements H1N1 (Swine) flu Iceland volcano Explosion and oil spill in the Gulf Queensland Australia floods Piracy Social media explosion, including social media sites, ebooks, smart phones and tablets
As you review the list of the top 10 risks affecting organizations and compare the rankings between 2009 and 2011, it is no surprise that these events have had an influence on how organizations view risk and prioritize their resources to respond. The economic slowdown has maintained the top rank in our survey and the fallout of the credit crisis first identified in mid-2007 continues to impact organizations around the world. Technological advances are posing challenges to organizations as they struggle to maintain the IT infrastructures necessary to support their business models, remain innovative and competitive in their industries, and adapt to the infiltration of social media. The study findings highlight the interdependency between the impact of the economy and various additional key risks. Throughout the economic recession, many organizations pulled in their oars, tabling research and development projects, decreasing spend on information technology and freezing hiring. Today, business leaders are realizing this strategy wont work in the long term. Showing up on the top 10 list this year are failure to innovate/meet customer needs, technology/system failure and failure to attract or retain top talent. Organizations must begin reinvesting in fundamental areas such as these if they are to survive and thrive. This years survey also highlights that the ability to embrace and leverage technology is emerging as a dominant factor underlying many of the key risks facing organizations. The failure to innovate/meet customer needs and the risk of technology/system failure entered the top 10 list for the first time. With the heavy reliance on their technological infrastructure, businesses are becoming more vulnerable to system failures, data breaches and social media exposure, causing business interruptions, loss of customers and damage to reputation. This risk will only continue to grow as businesses are investing more heavily in technology and the use of technology as part of the global infrastructure continually advances. Of equal interest when reviewing the survey results are the events that didnt happen in the past two years: No major terrorist events on the scale of 9/11 Mild 2010 hurricane season Prolonged soft commercial insurance market for traditionally insurable risk With terrorism largely off the radar screen in the past two years, organizations have collectively lowered the priority ranking of this risk to 45. It is shocking to believe that after only a decade organizations have dramatically lowered the priority of one of the most impactful risk events in recent world history. The prolonged soft insurance market combined with limited resources due to economic conditions has impacted the focus companies are giving to measuring total cost of risk. Less than 40 percent of respondents measure their total cost of risk, which is down from 44 percent in 2009. Global respondents should find the regional comparisons enlightening, as they provide insights into the maturity level of risk management processes by geography. In Latin America, crime/theft/fraud/employee dishonesty is tied for #1 on the list, yet not included in the top 10 risks at all in other geographies. Asia Pacific is challenged to attract or retain top talent, ranking this risk as #2, as they compete with international companies located in more cosmopolitan global cities like New York, London or Washington D.C. to retain their best and brightest talent.
Particular insights can be drawn from the reported readiness for each of the top 10 risks identified. Despite the significant impact of the credit crisis on organizations, a factor underlying the #1 rank for the economic slowdown and the #10 rank for cash flow/liquidity risk, 77 percent of respondents (the highest of any top 10) felt ready to deal with this risk. The reality is that organizations had to manage this risk in order to survive: Credit lines are life lines for growing organizations and all resources were exhausted to restore liquidity to ensure long term viability. On the low end of readiness is the failure to attract or retain top talent, dropping to 60 percent from 68 percent in 2009. Despite the concern about employee retention, most organizations benefited from a non-mobile workforce during the peak of the recession as employees hunkered down, happy to have any job at all. Now that the unemployment rate is starting to decrease and companies are recording profits and beginning to hire again, the need to be ready for this risk is elevated and many organizations will be challenged if they do not engage employees. What is not in the main body of the report, but shown at the end of this foreword for your benefit, is the list of all risks and their respective rankings. This list, when considered in the context of the multiple years of Aon survey results, demonstrates that until a risk is having a direct impact on an organization, it is not considered a key risk. Low on the priority ranking this year are counter party credit risk (32), pandemic risk (36), climate change (44) and terrorism (45). Out of sightout of mind appears to be the mentality here. It is important for organizations to assess the likelihood and potential impact of all viable risk events in order to be prepared for the next black swan before it strikes. Failure to do so could have catastrophic consequences. We hope you find the results of this survey insightful and useful to your risk management planning. As you reflect on the inferences and how it may help your organization, we invite you to take the Aon Risk Maturity Index. The Aon Risk Maturity Index, developed in partnership with The Wharton School of the University of Pennsylvania, is the first-of-its-kind tool for leaders in finance and risk management to assess their organizations risk management capabilities and receive immediate feedback in a Risk Maturity Rating with comments for improvement. In addition to immediate feedback, all companies who participate in the Index will be provided with a summary report on Aons global findings later this year. For more information, contact us at risk.maturity.index@aon.com
Best regards,
Stephen Cross Chairman Aon Centre for Innovation and Analytics stephen.cross@aon.ie
Executive Summary
Aons 2011 Global Risk Management Survey was conducted in 10 languages in Q4, 2010, encompassing 960 companies from 58 countries in all regions of the world. The third of its kind since 2007, this online biennial survey aims to help companies stay abreast of emerging issues and learn what their peers are doing to manage risks and capture opportunities. This survey, similar to prior years, covers the following topics: Top risk concerns facing companies today How companies identify and assess risk Approach to risk management and board involvement Risk management functions Insurance markets Risk financing Global programs Captives Top 10 risks
2011 1. 2. 3. 4. 5. 6. 7. 8. 9. Economic slowdown Regulatory/legislative changes Increasing competition Damage to reputation/brand Business interruption Failure to innovate/meet customer needs Failure to attract or retain top talent Commodity price risk Technology failure/system failure
Top 10 Risks
Even as economies show signs of recovery from the global financial crisis, respondents still see economic slowdown as the top risk. For the first time, two new risks enter the top 10 list: failure to innovate/meet customer needs and technology failure/ system failure. The highest percentage for risk readiness (77 percent) is cited for cash flow/liquidity risk, up from 75 percent in the prior survey. Respondents feel least ready for failure to attract or retain top talent60 percent cite this risk, down from 68 percent.
10
Global programs
When asked how companies operating in more than one country purchase/control their insurance programs, 59 percent say they have a centralized operating structure, where corporate headquarters control procurement of all of their global and local insurance programs, while 38 percent say their corporate headquarters control some lines and leave local offices to purchase other lines. Among the global policies that organizations have purchased, the most common types are general liability including public/product liability, as well as property damage/business interruption. Only three percent of surveyed companies allow each operation to buy their own insurance with no coordination from corporate headquarters.
Captives
As an integral part of the organizations risk management program, captive insurance companies or captives continue to be used by organizations in virtually all industry groups and geographic regions. Twenty-six percent of survey respondents report having an active captive or Protected Cell Company (PCC). However, during the economic downturn, there were greater activities surrounding and interest in exit strategies. In the current survey, eight percent of respondents indicate an interest in closing their captive vehicle and six percent consider their captive vehicle to be dormant or in run-off. Over the next few years, while we are not expecting prolific growth in new captive formations on a global scale, we anticipate the vast majority of owners will remain committed to their captive strategy.
Insurance markets
The message has been consistent and clear. For the third straight time, financial stability is cited as the top criterion in an organizations choice of insurers, illustrating the fact that concerns for competitive pricing is still tempered by an interest in dealing with carriers who have the financial capacity to pay claims. Prompt settlement of large claims sees the greatest increase in priority among all the surveyed factors, from number nine in 2009 to number five. This could be driven by the higher than normal natural catastrophe losses that occurred in 2010, in regions outside North America.
Conclusion
As the world is slowly recovering from the recession, conditions remain challenging for many and risk retains a high position on every organizations agenda. While it is hard to predict which risk might emerge and demand our immediate attention, we can be certain that successful companies will not be the ones taking a wait and see approach. Instead, they will be the ones who prepare themselves thoroughly to anticipate future needs and undertake the difficult process of finding solutions to address them. They will not just fix what is broken, but view their new circumstances as a portal to the next generation of business opportunity.
Risk financing
Commercial insurance has been in a soft pricing market since 2004 and every year the expectation for a harder pricing environment increases. The 2011 survey shows no indication of its arrival yet. Flat to single-digit rate change appears to be the norm among respondents. The majority of the organizations surveyed are comfortable with their current limits purchased, and maintain their current deductible/retention levels. Coverage terms and conditions remain stable and in some cases, have broadened.
11
Respondent Profile
The number of respondents has nearly doubled in the 2011 survey, from 551 to 960
12
Aons Global Risk Management Survey, a Web-based biennial research report, was conducted in Q4, 2010 in 10 languages. The number of respondents has nearly doubled, from 551 in the last survey to 960, representing a broader range of industry sectors and encompassing 58 countries from all regions of the world. About 44 percent of the participants are privately-owned companies and 40 percent public-owned organizations. The rest are primarily government or not-for-profit entities. The wide geographical reach and broad coverage of industry sectors have enabled us to provide a global and balanced overview of the risk challenges facing organizations today. The robust representation across many industry groups has also provided the data to support the fact that many risks are common to all industries.
Survey respondents by industry Industry Agribusiness Aviation Banks Chemicals Consumer Goods Manufacturing Construction Educational and Nonprofits Food Processing and Distribution Government Health Care Hotels and Hospitality Insurance, Investment and Finance Lumber, Furniture, Paper and Packaging Machinery and Equipment Manufacturers Percent 2% 3% 5% 4% 3% 6% 5% 4% 3% 6% 3% 7% 2% 4% Industry Metal Milling and Manufacturing Natural Resources (Oil, Gas and Mining) Non-Aviation Transportation Manufacturing Non-Aviation Transportation Services Pharmaceuticals and Biotechnology Printing and Publishing Professional and Personal Services Real Estate Retail Trade Rubber, Plastics, Stone and Cement Technology Telecommunications and Broadcasting Utilities Wholesale Trade Percent 5% 4% 2% 4% 2% 1% 5% 3% 5% 1% 5% 2% 4% 3%
Footnote: Restaurants included in Hotels and Hospitality; Beverages included in Food Processing and Distribution; Textiles included in Consumer Goods Manufacturing
13
Respondent Profile
7%
2% 2% North America Europe Asia Pacic Latin America Middle East & Africa
29% 60%
3% 3% 4% 5% 8%
27%
14
16% 7%
17%
14% 22%
15
Respondent Profile
10%
9%
1 25 610
6% 5%
1115 1625
7%
21%
16
Top 10 Risks For two consecutive surveys, respondents rate economic slowdown as the top risk facing their organizations today. Failure to innovate/meet customer needs and technology failure/system failure have entered the top 10 list for the first time. The highest percentage for risk readiness is cited for cash flow/liquidity risk (77 percent). Respondents feel least ready for failure to attract or retain top talent with 60 percent citing this risk.
18
1 2 3 4 5 6 7 8 9 10
Economic slowdown Regulatory/legislative changes Increased competition Damage to reputation and brand Business interruption Failure to innovate/meet customer needs Failure to attract or retain top talent Commodity price risk Technology failure/system failure Cash flow/liquidity risk
Top 10 Risks
1 10
Economic slowdown
While the economic crisis has abated in most parts of the world, organizations are still concerned about a double-dip recession. Fueling this concern are continued high unemployment rates and unease over the debt sustainability of many of the largest economies supported by monetary and fiscal policies that cannot be maintained into perpetuity. As the economic situation continues to improve, we anticipate that concerns for this risk may gradually recede in the next two years. According to recent estimates, only two out of the worlds top 50 countries are predicted by consensus analysts on Bloomberg to experience negative GDP growth in 2011. This compares very favorably to 2009 when 32 countries suffered negative growth.
Highlights
#1 risk in 17 out of the 27 surveyed industries #1 risk across all geographies Risk that has led to the greatest reported
20
Top 10 Risks
2 10
suggesting that these positions may view it more as a cost than risk
Banks have reported the greatest losses related to
22
Top 10 Risks
3 10
Increased competition
Many variables can impact the competitive position of an organization in a certain industry sectoreconomic trends, regulatory changes, entry of new competitors, changes in consumer trends, advancements in technology, use of lower-cost resources from developing economies and aggressive strategies by competitors. In this rapidly changing marketplace, failure to adequately address these and other market changes could lead to irreversible loss of market share.
Highlights
#1 risk for Latin America #2 risk reported by CEO, CFO and Chief Legal Counsel #1 risk for the wholesale trade industry More than 70 percent of respondents in the construction
and telecommunications and broadcasting industries have reported losses last year due to increased competition
24
Top 10 Risks
4 10
this could be driven by the proximity of its products to end users, stringent regulatory oversight and heightened public scrutiny
#2 risk cited by companies in the United Kingdom Ranking increases when number of employees increases;
26
Top 10 Risks
5 10
Business interruption
Business interruption refers to an anticipated or unanticipated disruption of an organizations normal operations. Losses can arise from many sources, some manmade, others natural. The factors that contribute to business interruption are often sudden and can change rapidly, making it a challenging risk to understand and manage. Some of these exposures can be insured while others can only be mitigated. As companies expand overseas or components are acquired abroad, the interdependence of global business partners as well as outsourcing and offshoring, have increased their international exposures, which are more volatile and complicated. The recent events in Japan provide a clear example of this and further reinforce the importance of having risk mitigation strategies for business interruption exposure.
Highlights
Down from #3 in 2009 and #2 in 2007 #2 risk for pharmaceutical and biotechnology industries
which could feel more vulnerable to disruptive events at their manufacturing or suppliers facilities; the highly specialized equipment and settings are not easily replaced in the event of a loss; rebuilding or restarting the operations may be subject to strict regulatory approval
Nearly 7 in 10 respondents have a plan for or have undertaken
28
Top 10 Risks
6 10
30
Top 10 Risks
7 10
growth may have used up the limited pool of available talents while education/training have been unable to keep up
#3 risk in professional and personal services
32
Top 10 Risks
8 10
A surge in commodity prices occurred toward the end of 2010, after the survey had been conducted. For example, The Economist commodity index was up by an annualized seven percent in June 2010 but up over 33 percent by December that year. Therefore, we believe that the stability of commodity price looms as a bigger concern for many organizations than this ranking might suggest. Of principal concern is the price of energy, hence the high ranking for the natural resources industry, influenced by potential political conflicts and natural disasters in the regions of major oil producers. It is hard to think of a corporation that is not affected either directly or indirectly by commodity prices in general, and specifically, the price of energy. Unlike many of the other risks on the top 10 list, commodity price risk has a direct and measurable cost to most organizations. For this reason, it is not surprising that 45 percent of respondents have reported related income losses and over 70 percent are prepared to deal with it.
Highlights
#1 risk rated by the natural resources (oil, gas and mining)
and food processing and distribution industries. For these industries, it is an opportunity risk which is manageable and integrated into their overall business strategy
#2 risk for German companies 45 percent have reported related income losses as costs increase 76 percent have a plan for or have undertaken a formal review
of this risk
34
Top 10 Risks
9 10
transportation services, pharmaceuticals and biotechnology and telecommunications and broadcasting industries
Top 10 risk in all regions except North America, where
companies maybe relatively better prepared through heavy investment in technology upgrades and wider adoption of business continuity plans
Latin America is the least prepared and has reported
36
Top 10 Risks
10 10
USD 1 billion; smaller companies have fewer assets against which to borrow
A greater concern for companies in Latin America than
38
Top 10 Risks
Top 10 risks
Risk rank 1 2 3 4 5 6 7 8 9 10 2011 Economic slowdown Regulatory/legislative changes Increasing competition Damage to reputation/brand Business interruption Failure to innovate/meet customer needs Failure to attract or retain top talent Commodity price risk Technology failure/system failure Cash flow/liquidity risk 2009 Economic slowdown Regulatory/legislative changes Business interruption Increasing competition Commodity price risk Damage to reputation Cash flow/liquidity risk Distribution or supply chain failure Third-party liability Failure to attract or retain top talent 2007 Damage to reputation Business interruption Third-party liability Distribution or supply chain failure Market environment Regulatory/legislative changes Failure to attract or retain staff Market risk (financial) Physical damage Merger/acquisition/restructuring Failure of disaster recovery plan
9 10
Note: In Europe risks 9 and 10 are tied for ninth. In Latin America risks 13 are tied for first and risks 48 are tied for fourth. In the Middle East & Africa risks 1 and 2 are tied for first, risk 4 and 5 are tied for fourth and risks 79 are tied for seventh. In North America risks 9 and 10 are tied for ninth.
40
Key Risk 1 Regulatory/legislative changes Economic slowdown Economic slowdown Economic slowdown Economic slowdown Economic slowdown Regulatory/legislative changes Commodity price risk Economic slowdown Regulatory/legislative changes Economic slowdown Regulatory/legislative changes
Key Risk 2 Commodity price risk Increasing competition Regulatory/legislative changes Regulatory/legislative changes* Increasing competition Increasing competition Economic slowdown Damage to reputation/brand* Regulatory/legislative changes* Increasing competition Business interruption Economic slowdown
Key Risk 3 Product recall Regulatory/legislative changes, Third party liability Capital availability/credit risk Commodity price risk, Business interruption Damage to reputation/brand Distribution or supply chain failure Damage to reputation/brand** Product recall Failure to attract or retain top talent* Economic slowdown Regulatory/legislative changes Damage to reputation/brand Regulatory/legislative changes, Exchange rate fluctuation, Business interruption Regulatory/legislative changes, Distribution or supply chain failure Business interruption Regulatory/legislative changes** Increasing competition, Failure to innovate/meet customer needs, Distribution or supply chain failure** Increasing competition Distribution or supply chain failure** Failure to attract or retain top talent Physical damage** Increasing competition Failure to innovate/meet customer needs, Business interruption Increasing competition Economic slowdown, Business interruption, Computer Crime/Hacking/ Viruses/Malicious Codes Commodity price risk Regulatory/legislative changes
Economic slowdown
Commodity price risk Failure to innovate/meet customer needs Commodity price risk Political risk/uncertainties
Economic slowdown
Economic slowdown Regulatory/legislative changes Economic slowdown Economic slowdown Economic slowdown Economic slowdown Economic slowdown
Regulatory/legislative changes* Business interruption Professional indemnity/errors and omissions liability Damage to reputation/brand Damage to reputation/brand Commodity price risk Failure to innovate/meet customer needs Increasing competition Economic slowdown Economic slowdown
41
Top 10 Risks
Economic slowdown Regulatory/ legislative changes Increasing competition Damage to reputation/ brand Business interruption Failure to innovate/ meet customer needs Failure to attract or retain top talent Commodity price risk Technology failure/ system failure Cash ow/liquidity risk
2011
2009
42
2011 82% 82% 79% 77% 75% 74% 71% 71% 71% 70% 70% 70% 70% 70% 69% 69% 68% 67% 67% 66% 65% 64% 62% 62% 60% 58% 58%
2009 83% 54% 64% 72% 83% 68% 87% 74% 63% 82% 79% 78% 57% N/A 83% 56% 73% 72% 57% 76% 78% N/A 79% 68% 66% 65% 58%
Change -1% 28% 15% 5% -8% 6% -16% -3% 8% -12% -9% -8% 13% N/A -14% 13% -5% -5% 10% -10% -13% N/A -17% -6% -6% -7% 0%
43
Top 10 Risks
Compared to that of 2009, we have noticed a decline in average reported readiness for the top 10 risks in each region. The decrease could be attributed to the changes in the top 10 risk makeup and respondent profile in the current survey.
100
75
50
85% 71% 71%
25
58% 50%
Initial/Lacking
Basic
Dened
Operational
Advanced
The Aon Risk Maturity Index, developed in partnership with The Wharton School of the University of Pennsylvania, is the first-of-its-kind tool for leaders in finance and risk management to assess their organizations risk management capabilities and receive immediate feedback in a Risk Maturity Rating with comments for improvement. Please email risk.maturity.index@aon.com if you would like to learn more about how you can determine your risk maturity rating.
44
of the risk, and yet 45 percent are unable to avoid a loss. This is consistent with expectations for companies who are highly exposed to the commodity price risk, where even with the right planning in place, companies will not always be able to prevent lossses.
financial crisis was at its peak. Depending on the industry, the losses from the crisis might not have thoroughly assessed the losses yet.
The increase also reflects the continued challenges companies
are facing during the slow economic recovery. The percentage of companies reporting commodity price-related losses has dropped from 57 percent in 2009 to 45 percent in the current survey. The decrease corresponds with its drop in overall risk ranking from fifth in 2009 to eighth this year (we discussed this earlier). It is also interesting that, similar to results in prior surveys, over 75 percent of respondents mention that they have plans in place to address this risk or have undertaken a formal review
Economic slowdown and commodity price top the list of losses arising from the top 10 risks
45
On average, 27% have reported loss of income from the top 10 risks
Top 10 Risks
Industry Agribusiness Aviation Banks Chemicals Construction Consumer Goods Manufacturing Educational and Nonprofits Food Processing and Distribution Government Health Care Hotels and Hospitality Insurance, Investment and Finance Lumber, Furniture, Paper and Packaging Machinery and Equipment Manufacturers Metal Milling and Manufacturing Natural Resources (Oil, Gas and Mining) Non-Aviation Transportation Manufacturing Non-Aviation Transportation Services Pharmaceuticals and Biotechnology Professional and Personal Services Real Estate Retail Trade Rubber, Plastics, Stone and Cement Technology Telecommunications and Broadcasting Utilities Wholesale Trade
Notable change compared to 2009
Change -11% N/A 7% 3% -3% -19% -12% -3% N/A 5% -1% -6% 1% -5% 3% -6% -12% -2% -29% 0% -4% -6% -8% -11% 4% -7% -7%
48
Region Latin America Europe Asia Pacific North America Middle East & Africa
49
Identifying, Assessing, Measuring and Managing Risk The majority of respondents consider lowering total cost of risk as one of the top benefits of investing in risk management at 61 percent, yet less than 40 percent have tracked and managed all components of their TCOR, down from 44 percent in 2009. Senior managements intuition and experience remains the primary method used by survey respondents to identify and assess major risks facing their organizations.
50
Lack of resources/expertise Lack of data/information Dont find the process valuable Dont measure cost of risk
*The percentage in this table does not add up to 100 percent as respondents have the option to select more than one answer.
58%
44% 39%
60%
82% 74%
100
51
On the other hand, the use of business unit risk registers and enterprise-wide approach to identify and assess risk is more desirable than the use of senior management intuition and experience, adding depth to the process and enabling the organization to more effectively assess the potential impact of an identified risk on the organization so it can deploy appropriate resources for treatment. Organizations with revenues greater than USD 1 billion are more than twice likely to utilize a structured enterprise-wide approach in the identification and assessment of risks than companies under USD 1 billion. As risks increase in complexity, organizations must integrate intuition and experience with appropriate analytics to make the most informed objective and proactive decisions.
or new risks;
risk identification based on intuition may not be consistent
across the organization or over time, and may not be given credence by others; and
there may be a tendency toward risk aversion by managers
Senior managements intuition and experience remains the primary method used by survey respondents to identify and assess major risks facing their organizations
52
Identication by region
100
3% 18%
2% 19% 2%
4% 17% 3% 15%
Other Structured enterprise-wide approach External service provider/advisor Business unit risk registers or key risk indicator worksheets Senior management intuition and experience Board level discussion and analysis
80
3% 21%
4%
60
35%
29% 5%
40
43% 30% 29%
20
12% 13% 19% 19%
23%
9%
9%
All
Asia Pacic
Europe
100
3% 10% 3%
4%
3%
4%
80
15%
20% 4%
30%
32%
34% 46%
External service provider/advisor Business unit risk registers or key risk indicator worksheets Senior management intuition and experience Board level discussion and analysis
3%
4%
60
40
20
15% 8%
36%
23%
10%
4%
14%
2%
< 1B
1B4.9B
5B9.9B
10B14.9B
15B24.9B
25B+
53
Assessment by region
100
3% 16%
2%
3% 14% 7%
Other Structured enterprise-wide approach External service provider/advisor Business unit risk registers or key risk indicator worksheets Senior management intuition and experience
25%
80
7% 3%
60
26% 27%
9%
40
14% 42% 35% 35% 18% 14% 33% 47%
20
7%
8%
12%
9%
5%
All
Asia Pacic
Europe
100 80 60 40
2% 10% 8%
4% 19% 6%
4% 24% 4% 4%
3%
4%
29%
28%
27%
External service provider/advisor Business unit risk registers or key risk indicator worksheets Senior management intuition and experience Board level discussion and analysis
23% 25%
3%
4%
28%
27%
20 0
10% 4%
33%
5%
4%
4%
< 1B
1B4.9B
5B9.9B
10B14.9B
15B24.9B
25B+
54
34% use brokers or independent consultants as the primary source to determine limits of insurance
55
100
6% 4%
5% 4% 13% 5%
4% 6%
5% 10%
9%
6% 2% 15%
Other Specic study or structured workshop Quantitative analysis or metrics Rely on broker or independent consultant
80
18%
21% 14%
40%
60
34% 30% 30% 39% 14%
33%
40
19% 22% 25% 25% 20% 16% 21% 13% 8% 20% 9% 21% 36% 23%
20
All 2011
All 2009
Asia Pacic
Europe
100
5% 3% 13%
6% 6% 18%
8% 4% 23%
4% 8% 16%
7%
8% 4%
80
60
43%
29%
23% 28%
40
18% 23%
20
24%
13%
10%
15%
< 1B
1B4.9B
5B9.9B
10B14.9B
15B24.9B
25B+
56
61% cite lowering TCOR as a top benefit for investing in risk management
Category
2011: All 71% 61% 55% 46% 41% 40% 29% 23% 18% 2%
2009: All 67% 69% 50% 48% 37% 40% 39% 26% 16% 1%
More informed decisions on risk taking/ risk retention Lower total cost of insurable risk Improved internal controls Improved business strategy Improved standards of governance Improved business continuity planning Increased shareholder value Increased return on investment Reduced compliance costs Other
57
Economic volatility is cited as the most important external driver strengthening risk management
Economic volatility Increased focus from regulators Demand from investors for greater disclosure and accountability Large third party liability losses/litigation Pressure from customers Natural weather events Other Workforce issues Political uncertainty Pressure from suppliers/vendors 0
2011
2009
10
20
30
40
50
58
The number of respondents describing themselves as Operational or Advanced has increased by 13%
39% 34%
2010
2011
24%
16%
12% 7%
Dened
Su cient capabilities to identify, measure, manage, report and monitor major risks; policies and techniques are dened and utilized (perhaps independently) across the organization
Operational
Consistent ability to identify, measure, manage, report and monitor risks; consistent application of policies and techniques across the organization
Advanced
Well-developed ability to identify, measure, manage and monitor risks across the organization; process is dynamic and able to adapt to changing risk and varying business cycles; explicit consideration of risk and risk management in management decisions
*2010 data is from Aons 2010 Global Enterprise Risk Management Survey. The information provided is an extract of Aons proprietary Risk Maturity Index and should not be construed as full assessment of risk maturity, but rather as an indicator. The ranking above represents a respondents self assessment of maturitybased upon their review of the maturity levels. Based on the findings from Aons 2010 Global Enterprise Risk Management Survey Aon has developed, in conjunction with the Wharton School of the University of Pennsylvania, the Aon Risk Maturity Index. Please send an email to risk.maturity.index@aon.com if you would like to learn more about how to determine your risk maturity rating.
59
Board Oversight and Involvement As is consistent with the prior two surveys, risk remains firmly on board agendas. Three out of four companies say their board or a board committee has established or partially established policies on risk oversight and management.
60
Organizations with a risk management department are more likely than those without one to have established or partially established board policies on risk oversight and management.
More than 80% of companies with USD 1 billion or more have board policies on risk oversight and management
61
3 out of 4 companies say their boards or board committees have established or partially established policies on risk oversight and management
Board of directors or a board committee has established policies on risk oversight and management by risk management department
100
5% 20%
7% 17%
5% 15%
5%
Dont know No
75
25% 27% 29%
32%
Partially Yes
50
33%
25
48%
47%
56% 30%
All-2011
All-2009
Board of directors or a board committee has established policies on risk oversight and management by revenue (in USD)
100
4%
9%
5% 12%
7%
8% 9%
8% 7%
12% 4% 16%
8% 8%
3% 10%
3% 8%
10%
2%
4%
75
19%
30% 35%
31%
22%
50
29% 25% 77% 68% 58% 37% 39% 62% 53% 66% 57% 69%
25
34%
54%
< 1B 2011
< 1B 2009
1B4.9B 2011
1B4.9B 2009
5B9.9B 2011
5B9.9B 2009
10B14.9B 2011
10B14.9B 2009
15B24.9B 2011
15B24.9B 2009
25B+ 2011
25B+ 2009
Yes
Partially
No
Dont know
63
Nearly 9 out of 10 companies have some board-level involvement in their current approach to risk management
64
100
8% 4%
6% 5%
7% 3%
10% 6%
75
19%
15%
20%
15%
Board considers specic business risks Board reviews and approves annually (or periodically)
32%
50
31%
28% 39%
25
38%
42%
41% 30%
All-2011
All-2009
100
4% 12%
8%
2% 3%
4% 6%
4% 5%
5% 5% 14%
12% 8% 12%
5%
3%
3% 5%
6% 4%
2%
12%
21%
15%
21%
75
17%
9%
25% 31% 31% 31% 28% 24% 35% 17% 30% 17%
50
36%
37%
25
32% 34%
43%
45%
50% 43%
52%
< 1B 2011
< 1B 2009
1B4.9B 2011
1B4.9B 2009
5B9.9B 2011
5B9.9B 2009
10B14.9 B 2011
10B14.9B 2009
15B24.9B 2011
15B24.9B 2009
25B+ 2011
25B+ 2009
No board involvement
Dont know
65
Risk Management Department and Function Seventy percent of the respondents indicate that they have a formal risk management department. Despite the economic slowdown, the levels of risk management department staffing appear, on an aggregate level, to have remained stable, with the majority of organizations maintaining staffing levels at fewer than five employees. The Chief Risk Officers role is growing31 percent of respondents say they have CROs vs. 25 percent in 2009.
66
The CRO role is growing 31% of respondents have CROs vs. 25% in 2009; companies in more regulated industries are more likely to have a CRO
2011 12% 19% 6% 60% 2% 2009 11% 14% 10% 62% 3% 2007 8% 17% 10% 60% 4%
67
The larger a companys revenue and employee count, the more likely for it to have a formal RM department
68
5B9.9B 95% 5%
10B14.9B 96% 4%
15B24.9B 100% 0%
25 B+ 98% 2%
4% 7%
3% 1%
Chief Financial O cer Other* Chief Executive, President
7%
41%
7%
14% 16%
69
41% of respondents with no formal RM departments say their CFOs handle risk management
72
100
3% 7% 4% 6% 7% 7% 17%
2% 3% 10%
4% 8% 4% 16%
5% 10% 8% 20%
4% 16%
7% 10% 17%
11% 19%
80 60 40
17%
25% 24%
4%
65% 67%
84%
68%
45%
20
21%
0
All-2011 All-2009 < 1B 1B4.9B 5B9.9B 10B14.9B 15B24.9B 25B+
15
611
1215
1640
Over 40
73
More than of respondents in Asia Pacific and Middle East & Africa do not have claim and safety/risk control staff
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Safety/risk control staff within risk management dept by revenue (in USD)
Revenue < 1B 1B4.9B 5B9.9B 10B14.9B 15B24.9B 25B+ 12 60% 45% 41% 38% 31% 45% 35 10% 8% 14% 13% 7% 13% 69 1% 5% 5% 4% 10% 2% 10+ 2% 5% 7% 4% 10% 9% None 25% 37% 33% 42% 41% 32%
75
Survey results show a decrease in the use of third-party providers. If this downward trend continues and in-house staff are not picking up the services formerly provided by third parties, it may adversely affect the organizations overall ability to effectively manage risks.
76
77
Insurance Markets For the third straight time, financial stability is cited as the top criterion in an organizations choice of insurers, illustrating the fact that concerns for competitive pricing are still tempered by an interest in dealing with carriers who have the financial capacity to pay claims. When asked what changes organizations would most like to see in the insurance market, the majority of respondents desire broader coverage/better terms and conditions.
78
2011 Rank 1 2 3 4 5 6 7 8 9 10
2009 Rank 1 2 3 5 9 6 4 7 8 10
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Insurance Markets
On a regional basis, organizations in Europe appear to be the most satisfied with the insurance market while Latin American respondents feel their region has the most opportunity for improvementmore than 75 percent indicate that insurers need to improve coverage terms and conditions and be more flexible in program design and delivery.
from 63 percent in 2009 to 52 percent Even though these answers remain consistent with those in the previous survey, the number of respondents who list coverage/ better terms and conditions as a desired change has increased by 13 percent while the percentage of respondents seeking more flexibility has decreased by 11 percent. It clearly illustrates that in the current marketplace, companies are more focused on improving the coverage they currently have in place and are willing to sacrifice some flexibility and customized services to obtain it.
In the current marketplace, companies are more focused on improving the coverage they currently have in place and are willing to sacrifice some flexibility and customized services to obtain it
80
81
Risk Financing Flat to single-digit rate change appears to be the norm among respondents in the 2011 survey. Most organizations are comfortable with their current limits purchased and maintain their current deductible/retention levels. Coverage terms and conditions remain stable and in some cases, have broadened.
82
83
Risk Financing
Limits
Umbrella/Excess Liability When it comes to selecting the appropriate level of excess liability limits, there is no consistent process or definitive guidelines used by respondents. An optimal program design, characterized by broad coverage and efficient use of insurance funds, is driven by a number of factors: risk severity, risk mitigation measures already in place or under consideration, the regulatory environment in which companies operate, historical trend of loss activities, the insurance marketplace and appetite for risks. Similar to prior surveys, the most common limit purchased for 2011 is USD 100 million. The average limit purchased for all respondents totals USD 139 million. For companies with revenues of more than USD 1 billion, the average limit is USD 213 million, an increase from USD 184 million in 2009. This may be driven by opportunistic buying resulting from the continued soft market. In 2011, the highest limit reported by all respondents totals USD 1.25 billion in Latin America and the lowest is USD 1 million, which has been reported in multiple regions. In the 2009 survey, the highest limit was USD 1.7 billion in Europe, and the lowest remained the same. The level of limits purchased is in direct proportion to a companys revenue sizea larger company with a higher profile can represent a bigger target for legal actions. Interestingly, pharmaceutical and biotechnology companies have purchased the lowest average limit at USD 43 million, a dramatic change from 2009 when they bought the highest. Prior survey respondents may have reported their separate product liability limits while this years respondents may have reported only umbrella/excess liability limits excluding products. Among all the surveyed industry groups, the chemical industry has purchased the highest average limit at USD 325 million. This is consistent with its high historical loss or claim records.
The average and most common limit purchased by respondents in 2011 totals USD 139 million and USD 100 million respectively
Latin America 3,000,000 210,777,778 N/A 1,250,000,000 Middle East & Africa 1,000,000 215,528,571 N/A 714,285,714 North America 1,000,000 125,332,752 100,000,000 1,000,000,000
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Directors and Officers Liability The average D&O limit purchased by all respondents is USD 71 million, whereas companies with more than USD 1 billion in revenue have purchased an average of USD 114 million in D&O liability, up from USD 94 million reported in the 2009 survey. The highest limit purchased by any organization is USD 700 million in Europe compared to USD 500 million in 2009, while the lowest limit purchased amounts to USD 500,000 compared to USD 1 million in the prior survey. Since our first survey in 2007, two trends in D&O limits have remained consistentthe D&O limit purchased is in direct proportion with an organizations size and that public companies purchase much higher limits than private companiesits ratio for the average limit purchased is more than three to one in the current survey. Historically, private companies purchase lower limits because many feel they have no public shareholders, thus their D&O liability exposure is limited. In addition, private companies often times believe that they have the financial abilities to indemnify directors or officers for any claims that may arise. Nonetheless, D&O coverage is becoming more important to private companies which are facing litigation risks from shareholders, employees, creditors and the government.
The D&O limit purchased has been in direct proportion with an organizations size; the ratio in average limits purchased between public and private companies is more than 3 to 1
85
Risk Financing
81% of respondents are comfortable with the level of umbrella/excess liability limits purchased
15%
5%
81%
86
Directors & Officers Liability Similar to 2009, nearly 80 percent of respondents have reported that they are comfortable with the level of D&O limits purchased. The Asia Pacific region has the highest satisfaction level (85 percent), while Latin America is the least satisfied (38 percent). The banking industry is the least comfortable with their limits purchased (58 percent). While banks have recovered significantly from the height of the financial crisis, their lack of satisfaction with the limits purchased is probably caused by the uncertainties surrounding new and pending legislation as well as the continued turmoil in the financial markets. Interestingly, like the umbrella/excess liability, the position that shoulders the role of a primary stakeholder is often the least comfortable with the limits purchased. In this case, it is the CEO/ President for D&O.
Nearly 80% of respondents are comfortable with the level of D&O limits purchased
16%
5%
79%
87
Risk Financing
Similar to the results in the two prior surveys, property has experienced the most changes in retention levels. Twelve percent of respondents indicate an increase while six percent note a decrease. Increases in retention are most likely the result of an organizations exposure to natural catastrophe risk and adverse loss experience, combined with the desire to control premium spend. A particular example of this lies in the natural resources (oil, gas and mining) respondent group, 40 percent of which have had an increase in their overall retentions. When you consider the recent events including the Gulf of Mexico oil spill and the Chilean earthquake, it is not hard to understand why retentions have gone up for this industry.
The majority of organizations have not changed their retentions; property sees the most retention changes
2011-Workers Compensation 2009-Workers Compensation 2011-General Liability 2009-General Liability 2011-Products Liability 2009-Products Liability 2011-Auto Liability (not Physical Damage) 2009-Auto Liability (not Physical Damage) 2011-Directors and O cers Liability 2009-Directors and O cers Liability 2011-Property 2009-Property 2011-Professional Indemnity/Errors and Omissions Liability
92% 87% 90% 85% 90% 90% 90% 87% 90% 83% 82% 75% 90%
20
40
60
80
100
88
Changes in coverage
Overall, the majority of respondents indicate that the terms and conditions for all surveyed lines of coverage remain unchanged in comparison with the prior years programs. The coverage lines that have experienced the most improvement in coverage terms are property (31 percent) and D&O (37 percent). In a soft and competitive market, organizations have more ability and leverage to negotiate better terms and conditions for their coverage.
Terms and conditions for all surveyed lines of coverage remain unchanged; property and D&O have experienced the most improvement in coverage terms
Changes in coverage Workers Compensation/ Employers Liability General Liability/Public Liability Products Liability (if separate) Auto/Motor Vehicle Liability (not Physical Damage) Directors & O cers Liability Professional Indemnity/ Errors and Omissions Liability Property 0%
20%
8%
89%
2% 1%
18%
75%
5%
1%
10%
82%
6%
1%
7%
88%
4% 1%
37%
58%
4% 1%
74%
5%
2%
31%
62%
5%
1%
20%
40%
60%
80%
100%
Improved Policy Coverage Conditions Unchanged Policy Coverage Conditions Somewhat More Restricted Coverage Conditions Signicant More Restricted Coverage Conditions
89
Global Programs Most respondents (59 percent) operating in more than one country say their corporate headquarters control procurement of all of their global and local insurance programs, while 38 percent control some lines and leave local offices to purchase other lines. The most common types of global policies purchased are general liability including public/product liability, as well as property damage/business interruption.
90
insurance regulations;
How insurance cost is allocated and accounted for to ensure
The 2011 survey aims to gauge how companies handle such challenges. Respondents with operations in more than one country are asked how they purchase/control their insurance programs59 percent indicate that their corporate headquarters control procurement of all of their global and local insurance programs, while 38 percent say their corporate headquarters purchase some lines and leave local offices to handle other lines. Only three percent of surveyed companies allow each operation to buy their own insurance with no coordination from corporate headquarters.
payment of taxes and fees that would be due if insurance is procured in-country. Opportunities for efficiency lie in:
The approach to insurance procurement and cost efficiency
Nearly 60% of respondents with cross-border operations control procurement of all of their global and local insurance programs at corporate level
3%
5%
2%
3%
2%
1%
2%
38%
28%
40%
51%
50%
47%
38%
59%
67%
58%
46%
48%
52%
60%
91
Global Programs
Among companies with centralized operating structures, 50% have global policies issued to parent and local policies issued to local operations
All* 8%
25 13%
610 10%
1115 6%
1625 5%
2650 5%
51+ 5%
50% 4% 37%
44% 9% 34%
44% 6% 40%
63% 0% 31%
57% 0% 38%
47% 1% 46%
58% 0% 37%
92
(89 percent)
Property damage/business interruption (81 percent) Directors and Officers Liability (68 percent)
Traditionally, most companies simply consider general liability including public/product liability as well as property damage/ business interruption insurance for their global insurance purchase. However, in recent years, globally administered programs for D&O and other lines of coverage are gaining popularity as local regulations and requirements evolve and the carriers abilities to administer these programs strengthen. In this survey, 68 percent of surveyed companies have bought D&O on a global basis.
The most common types of global policies purchased are general liability including public/product liability, as well as property damage/ business interruption
Types of global insurance coverage purchased
Category General Liability including Public/Product Liability Property Damage/Business Interruption Directors and Officers Liability Auto/Motor Vehicle Liability Workers Compensation/Employers Liability Crime Other
*All represents respondent operating in more than one country.
93
Captives Captive insurance companies continue to be used by organizations in virtually all industry groups and geographic regions, with 26 percent of respondents report having an active captive or Protected Cell Company. Property and general liability are the most often underwritten lines of coverage within a captive. While we are not seeing prolific growth in new captive formations on a global scale, we anticipate the vast majority of owners will remain committed to their captive strategy.
94
26% of respondents have an active captive or Protected Cell Company, down from 37% in 2009
95
Captives
A correlation also exists between an organizations size and captive utilization. Larger and more sophisticated buyers are more likely to explore the captive option as part of their risk management and financing strategy. Only 12 percent of respondents under USD 1 billion of revenue have a captive. This percentage trend goes up significantly to over 50 percent for organizations with revenues in excess of USD 5 billion. Considering the diverse origins of parent companies and the changing respondent profile for the 2011 survey, it is not surprising to see that the percentages of captive owners by region have reduced by 30 to 40 percent in most regions. Europe still has a relatively high penetration with 34 percent of respondents owning a captive. North America is also considered a mature market for captives but possibly with some growth potential. We believe that there is room for substantial growth in captives in Latin America, the Middle East & Africa and Asia Pacific. Each of these regions is at a different stage of familiarity with the concept and process of captives. Market liberalization issues and a consequent lack of ease of local regulations are still barriers to
entry for potential captive owners in these regions. Realistically, development will be incremental for these regions over the medium term. While we are not seeing prolific growth in new captive formations on a global scale, we anticipate the vast majority of owners remain committed to their captive strategya policy which could provide significant benefits if/when the hard market conditions return.
Larger and more sophisticated buyers are more likely to explore the captive option as part of their risk management and financing strategy
2011 12% 33% 50% 64% 67% 72% 2009 19% 31% 53% 55% 67% 87% 2007* N/A 42% 54% 54% 53% 76%
96
Property and general liability are the most often underwritten lines of coverage within a captive
Employment practices liability: 48 percent increase Owner controlled insurance programs: 61 percent increase Employee benefits: 61 percent increase
The above facts are interesting and tie in with a general trend captive owners are seeking opportunities to create diversity across captive portfolios and use their captives strategically.
97
Coverage Property General/Third Party Liability Auto Liability Employers Liability/Workers Compensation Product Liability and Completed Operations Professional Indemnity/Errors and Omissions Liability Directors and Officers Liability Crime/Fidelity Catastrophe Terrorism Employee Benefits (Excluding Health/Medical and Life) Marine Health/Medical Employment Practices Liability Environmental/Pollution Life Credit/Trade Credit Third-Party Business Cyber Liability/Network Liability Financial Products Owner Controlled Insurance Program/ Contractor Controlled Insurance Program Other Aviation Sub-contractor default insurance Warranty
2011Currently underwritten 35% 32% 26% 23% 20% 18% 15% 12% 11% 11% 10% 10% 10% 9% 9% 9% 7% 7% 5% 5% 5% 5% 4% 2% 2%
2011Percentage change -5% -3% -2% 3% 3% 11% 22% 20% 33% 27% 61% 15% 42% 48% 56% 33% 71% 11% 74% 22% 61% -8% 39% 58% 208%
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Methodology
This Web-based survey addressed both qualitative and quantitative risk issues. Responding risk managers, CROs, CFOs, treasurers and others provided feedback and insight on their insurance and risk management choices, interests and concerns. Aon Analytics conducted this survey with the support of Aon Hewitts research specialists, who collected and tabulated the responses. Other Aon insurance and industry specialists provided supporting analysis and helped with the interpretation of findings. All responses for individual organizations are held confidential, with only the consolidated data being incorporated into this report. Percentages for some of the responses may not add up to 100 percent due to rounding or respondents being able to select more than one answer. All revenue amounts are shown in US Dollars.
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Aon at a Glance
Aon Corporation (nyse: aon) is the leading global provider of risk management services, insurance and reinsurance brokerage and human resources solutions and outsourcing. Through its more than 59,000 colleagues worldwide, Aon unites to deliver distinctive client value via innovative and effective risk management and workforce productivity solutions. Aons industry-leading global resources and technical expertise are delivered locally in over 120 countries. Named the worlds best broker by Euromoney magazines 2008, 2009 and 2010 Insurance Survey, Aon also ranked highest on Business Insurances listing of the worlds insurance brokers based on commercial retail, wholesale, reinsurance and personal lines brokerage revenues in 2008 and 2009. A.M. Best deemed Aon the number one insurance broker based on revenues in 2007, 2008 and 2009, and Aon was voted best insurance intermediary 20072010, best reinsurance intermediary 20062010, best captives manager 20092010 and best employee benefits consulting firm 20072009 by the readers of Business Insurance. Visit aon.com for more information on Aon and aon.com/manchesterunited to learn about Aons global partnership and shirt sponsorship with Manchester United.
Aon Analytics provides clients with forward-looking business intelligence, comprehensive benchmarking and total cost-of-risk analysis as well as global market insights using proprietary technology like the Aon Global Risk Insight Platform to enable more informed and fact-based decision making around risk management, risk retention and risk transfer goals and objectives.
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Centr e Aon
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tio
n and A n
Based in Dublin, Ireland, the Aon Centre for Innovation and Analytics provides Aon colleagues and their clients around the globe fact-based market insights. As the owner of the Aon Global Risk Insight Platform (GRIP), one of the worlds largest repositories of risk and insurance placement information, the Centre analyzes Aons USD 54 billion global premium flow to identify innovative new products and to provide Aon brokers insights as to which markets and which carriers provide the best value for clients.
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ly
t ic
Inn
In the Aon Situation Room, clients will find current insurer financial strength ratings and the most recent updates from Aons Market Security Committee on specific carriers. The latest news, legislative action and earnings information is included on the site as well. Clients can also register to receive up-to-date e-mail alerts.
Aon Global Risk Insight Platform (Aon GRIPSM) is the worlds leading global repository of global risk and insurance placement information. By providing fact-based insights into Aons USD 54 billion in global premium flow, Aon GRIP helps identify the best placement option regardless of size, industry, coverage line or geography. The Web-accessible data produced by Aon GRIP helps Aon brokers evaluate which markets to approach with a placement and which carriers may provide the best value for clients. It also gives Aon brokers a leg up when it comes to negotiations, making sure every conversation is based on the most complete, most current set of facts.
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Key Contacts
Aon Analytics Constantin Beier Head of Aon Analytics Aon Risk Solutions constantin.beier@aon.ie +353.1.266.6412 George M. Zsolnay IV Head of Aon Analytics U.S. Aon Risk Solutions george.zsolnay@aon.com +1.312.381.3955
For Media and Press Inquires Kelly Drinkwine Director of Public Relations Aon Risk Solutions kelly.drinkwine@aon.com +1.312.381.2684
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Aon Risk Solutions 200 East Randolph Street Chicago, IL 60601 +1.312.381.1000 aon.com
2011 Aon Corporation. This report is furnished for informational purposes only. Do not distribute or copy. Aon has endeavored to confirm the correctness of the data and opinions expressed in this report, however, neither Aon nor its employees make any representation or warranty as to the accuracy or completeness of the data or opinions expressed herein. Aon has no liability to the recipient or any other party resulting from the use of, or reliance upon, the contents of this report. 5522-K010079798-0511