<strong>By: Aon South Africa</strong>

<h2><strong>Is your business ready to take on the risks it could face?</strong></h2>

Businesses operate in a time of unprecedented volatility across economics, demographics and geopolitics.  More than ever you need to explore new ways to cope with evolving and inter-related complexities in a challenging business environment.

<a href="https://www.aon.co.za/" data-saferedirecturl="https://www.google.com/url?q=https://www.aon.co.za/&amp;source=gmail&amp;ust=1558438830500000&amp;usg=AFQjCNEpJqkYHOrQbOKpolG2zu_WpRM80w">Aon South Africa</a>, a leading insurance brokerage and risk advisor, has surveyed the risk and insurance landscape and reveal their take on the key risks that businesses need to focus on to ensure growth and stability:

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<li><strong>Risk readiness is falling, but volatility is growing - </strong>Businesses are slow to implement new risk and insurance programs for evolving risks such as cyber and political risk. Yesterday’s solutions no longer address the risks posed by a technologically, economically and politically fraught environment, so a new lens is needed to mitigate these evolving and serious risks.</li><li><strong>A widening skills gap and growing social discontent: </strong>Political and economic uncertainty are widening SA’s growing skills gap as highly skilled people emigrate.  Furthermore, alarming unemploymentrates are fueling growing social dissatisfaction, manifesting in violent service delivery protests which have caused significant losses to private and public property.</li><li><strong>Political Risks are a Global Challenge: </strong>Despite the availability of more data, analytics and mitigation solutions, companies are less prepared for political risk than ever before. Concerns over South Africa’s economy and indeed the world are not going away soon, so organisations should learn from the past as political uncertainty is one of the biggest enemies of business.</li><li><strong>Cyber risk: </strong>With the heavy reliance on technology, businesses are more vulnerable to system failures and data breaches causing business interruption, loss of customers and reputational damage. Any entity – regardless of size or nature of business - that conducts any aspect of its business online and holds sensitive data is a potential target for a cyber breach or hack.</li><li><strong>Weather </strong><strong>catastrophes to intensify with climate change: </strong>Property-related and business interruption losses as a result of fire and weather catastrophes have increased dramatically, with 2017 having the highest underwriting losses on record. While weather catastrophes increasingly account for the lion’s share of property and business interruption insurance claims, individuals and businesses remain under-insured for the impact of these uncontrollable risks.</li><li><strong>Business Interruption (BI): </strong>BI has been a Top 10 business risk since Aon’s Global Risk Management survey launched in 2007. As supply chains become globally integrated there is increasing interdependency, while inventory reduction and lean supply chains have amplified the risks of unexpected disruptions to business continuity. Cyberattacks have also added new urgency and dimension to BI. Lloyd’s estimate that cyber-related business interruption could cost businesses around US$400 billion a year.</li><li><strong>Market </strong><strong>volatility drives demand for payment protection: </strong>Defaulting debtors are likely to continue in response to weak trading conditions. SMEs are certainly at greater risk as their balance sheets are unlikely to carry them through a major default, while it’s foolhardy to think that big corporates don’t falter as recent business rescues have shown. Accounts receivable is one of the largest uninsured assets on a balance sheet, despite accounting for 40% and more of total company assets. Trade credit insurance is essential to mitigate these credit risks.</li><li><strong>Get serious about Directors and Officers Liability: </strong>Companies of all sizes, even non-profit organisations and membership associations need comprehensive cover for liabilities that could arise from wrongdoings by directors and officers in conducting their managerial responsibilities. Statistics over the last decade show that D&amp;O claims against privately-owned SME businesses and non-profits are as prevalent as they are in large listed entities, yet research by Datamonitor suggests that 70% of SMEs do not have any D&amp;O cover despite the increased regulatory scrutiny and litigious nature of society.</li>

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According to Aon, the role of professional and qualified advice linked to deep market insights becomes crucial in securing financial security in these challenging economic and socio-political environments.  Managing risk and costs is imminently more crucial as the inter- connectivity of traditional and emerging risks means organisations can no longer evaluate individual risks in isolation but must look at all the top risks and people in a more holistic way.  Regardless of size or status, there is no one size fits all approach to business risk insurance.  It all depends on the size of the company, nature of its business and its unique levels of exposure. Consulting with a professional Aon risk advisor is an invaluable exercise in protecting your business, reputation, clients, colleagues and bottom line.

For more information go to <a href="http://www.aon.co.za/" data-saferedirecturl="https://www.google.com/url?q=http://www.aon.co.za&amp;source=gmail&amp;ust=1558438830500000&amp;usg=AFQjCNF9Kw73JoRjEQqM_TDKaGA1xzqeZA">www.aon.co.za</a>