Aon Enterprise Risk Management

Today, companies must hold their own against the global competition. Economic interdependencies and unpredictable changes foster an insecure and constantly evolving environment, rife with entrepreneurial risk. To be successful in the long term, companies must ensure that these risks are adequately managed.

Enterprise Risk Management (ERM) offers a comprehensive risk management system based on an ongoing assessment of threats and opportunities. Our approach integrates risk management into existing processes, governance structures and managerial decision-making. As a result, risk-related decisions can be better communicated and supported.

The risk-management system comprises continuous and systematic analysis, monitoring and handling of business risks.

Risk analysis ensures that a company can systematically identify and evaluate the risks to which it is exposed. Our consulting encompasses the assessment of conventional risks, such as liability risks and, increasingly, emerging exposures such as cyber risks. Against the backdrop of ever more complex interdependencies with suppliers and partners, risks in connection with the supply chain are coming to the front.

Relying on risk analysis, a company can decide on coping and monitoring measures. A risk management system also requires an appropriate organisation, with reporting lines and decision-making bodies.

Recommendations "from the field"

There is no ready-to-go recipe for structuring a risk management system: risk management systems and the chosen implementation strategies must be designed to fit the corporate culture and sustain the organisation's risk management objectives. Aon project teams develop customised risk management systems which ensure that ERM will not be perceived as an imposed artificial bureaucracy. We recommend implementing the risk management system in phases, first developing a basic structure in this way. The structure can then be extended or adapted over time. We recommend the same approach for the development of a contingency plan in the framework of Business Continuity Management.

Based on our experience, we suggest a partnership consulting approach for the implementation of a risk management system. This approach is designed to secure the successful transfer of risk management know-how, and the integration of existing organisational structures and processes.

In co-operation with the Wharton School of the University of Pennsylvania, Aon has developed the Aon Risk Maturity Index (RMI) which can show you how your company's risk management system compares with that of other companies.

If you wish to participate in the RMI or to learn more about it, please send an email to: [email protected], or contact your Aon consultant. Participation in the RMI is non-binding and free-of-charge.