Local economic conditions are the biggest worry for Australian businesses, according to a broad-ranging new survey.
Negative growth and gloomy inflation forecasts have raised concerns, with domestic economic lethargy considered the primary obstruction to business development and recovery, according the Aon’s 2015 Australian Risk Survey.
Last year’s number one perceived risk, ‘regulatory and legislative policies’, has moved to number two. However the overall results for 2014/2015 have drawn a strong parallel to recent annual surveys, with 80 per cent of concerns being focused on abating business confidence and political uncertainty.
“Local economic conditions have been on an upward trajectory through the top ten risks over the last number of years. However, its top position this year signifies a critical need for organisations to identify and confront local economic threats in order to achieve sustainable growth and better compete on a global scale,” said Jason Disborough, Managing Director Global & Corporate, Aon Risk Solutions.
The softening market has been greeted by Disborough as the perfect opportunity for insurers to generate change and develop new products to address business risk concerns that are currently uninsurable.
“While the current state of the market presents a very real challenge to Australian businesses, it also presents an opportunity for insurers to innovate around these soft risks, a provision currently deficient in the Australian market,” he added.
Apprehension regarding the ability to grow business effectively highlights this year’s survey results, with brand and image, increased competition and global economic conditions filling out the remainder of the top five risk concerns.
Risks concerning Australian businesses are mostly level with those facing global companies, except for cyber security. Although cyber attacks are a concern in other countries, only 13% of Australian risk managers noted it as a significant threat in the current market.
Another factor that garnered lower concern than expected was terrorism. Australian companies consider themselves at less risk of loss due to terrorism activity than their overseas counterparts.
To view the full report, visit the Aon Connect site here.