Aon’s Global Risk Management Survey Finds Increasing Competition as Top Risk for Businesses in South Korea
SEOUL (29 March 2024) – Aon plc (NYSE: AON), a leading global professional services firm, today announced the findings from its 2023 Global Risk Management Survey for South Korea. Now in its 17th year, the biennial survey gathered inputs from nearly 3,000 risk managers, executives and human resource managers in 61 countries and territories to identify their most critical business challenges.
“The world is more volatile, reflecting a series of profound transitions across trade, technology, weather and workforce issues that have awoken business leaders to the increasingly interconnected nature of risk and people challenges,” said Greg Case, CEO of Aon. “Through advanced analytics and more integrated Risk Capital and Human Capital capabilities, we’re helping clients quantify, manage and match capital to the risks they recognize today as we innovate on their behalf to serve their future needs.”
Top Risks in South Korea
Increasing competition ranked as the top business risk in Korea in the most recent survey, after placing fifth in the 2021 edition. The rise in the perceived risk of increasing competition could be attributed to accelerated advancements in technology which are enabling some companies, including foreign organisations, to cut costs and forge new revenue streams. It is also driving the use of analytics to help businesses differentiate themselves from competitors by creating more efficient and individualized customer experiences. The rise in competition has resulted in a fall in Korea’s top ten exports – including semiconductors, petrochemicals and electronic products – placing a heavier burden on domestic conglomerates.
The number two risk for South Korean businesses is rapidly changing market trends, rising from seventh spot in the 2021 survey. Technological advancements such as artificial intelligence-driven innovation and the accompanying digital regulations, have been considerable and have a marked impact on the risk landscape for businesses in South Korea. Furthermore, respondents said market competition intensified with the introduction of new products and services, coupled with an increased supply of substitutes.
Property damage was ranked third by respondents in the survey. Closely linked to business interruption, property damage caused by fire and natural disasters is steadily increasing. Changes in legislation and regulations regarding accidents due to occupational hazards, following the implementation of the Serious Accidents Punishment Act in 2022, are also adding increased responsibility and accountability for greater safety measures on businesses.
Failure to attract or retain top talent ranked fourth globally and entered the top risks in Korea for the first time at number nine. As the competition for technological advancement intensifies worldwide, the race to secure skilled talent increases. The war for talent is expected to remain a top concern for businesses as they strive to remain relevant in a competitive market.
While cyber risk was ranked the number one risk for business leaders globally, it did not appear in the top ten risks for Korean businesses, indicating a lack of understanding, or a lag in the pervasiveness of cyber incidents.
“As the awareness of risk management increases in Korea, more companies are considering risk diversification through insurance contracts, but many companies are not taking steps to prepare internal resources and develop expertise for risk management in the long term,” said Kevin Kim, CEO for Aon in Korea. “Globally there is a heightened awareness of cyber security risks and as Korea is focusing on digitalization to remain competitive, there needs to be more focus on cyber risks in order to prepare for sustainable growth. There is a strong need for a mindset shift towards better risk preparedness, utilising data, analytics, and expert advice to navigate business risks,” added Kim.
The Top Ten Business Risks for South Korea:
- Increasing Competition
- Rapidly Changing Market Trends
- Property Damage
- Regulatory/Legislative Changes
- Exchange Rate Fluctuation
- Economic Slowdown/Slow Recovery
- Work Injuries
- Commodity Price Risk/Scarcity of Materials
- Failure to Attract or Retain Top Talent
- Failure to Innovate/Meet Customer Need
The Top Ten Global Risks Are:
- Cyber Attack/Data Breach
- Business Interruption
- Economic Slowdown/Slow Recovery
- Failure to Attract or Retain Top Talent
- Regulatory/Legislative Changes
- Supply Chain/Distribution Failure
- Commodity Price Risk/Scarcity of Materials
- Damage to Reputation/Brand
- Failure to Innovate/Meet Customer Needs
- Increasing Competition
About the Global Risk Management Survey
Aon's Global Risk Management Survey, a biennial web-based research report, was conducted in June to July 2023. The research gathered the responses from 2,842 decision makers including risk managers, c-suite leaders, treasurers, human resources and talent professionals from 16 industry clusters, which include small, medium and large companies in 61 countries/territories around the world. The key findings from the Global Risk Management Survey for South Korea are available here.
About Aon in South Korea
Aon was one of the first global firms to get an insurance broker license in Korea. Starting as Aon’s Seoul office in 1986 it became a corporation ten years later. More than 180 Aon colleagues across Korea currently serve to protect client’s assets and increase their brand value and competitiveness. Aon Korea’s main clients include domestic and foreign conglomerates, professional organisations, public enterprises and small and medium-sized businesses.
About Aon
Aon plc (NYSE:AON) exists to shape decisions for the better — to protect and enrich the lives of people around the world. Our colleagues provide our clients in over 120 countries and sovereignties with advice and solutions that give them the clarity and confidence to make better decisions to protect and grow their business.
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Disclaimer
The information contained in this document is solely for information purposes, for general guidance only and is not intended to address the circumstances of any particular individual or entity. Although Aon endeavours to provide accurate and timely information and uses sources that it considers reliable, the firm does not warrant, represent or guarantee the accuracy, adequacy, completeness or fitness for any purpose of any content of this document and can accept no liability for any loss incurred in any way by any person who may rely on it. There can be no guarantee that the information contained in this document will remain accurate as on the date it is received or that it will continue to be accurate in the future. No individual or entity should make decisions or act based solely on the information contained herein without appropriate professional advice and targeted research.