Brand and image, regulatory and legislative changes and local economic conditions are the most prominent risks facing Australian energy businesses in 2014/2015, according to Aon’s most recent Australasian Risk Survey.
The report, now in its 13th year, spans a sample size of 579 C-Suite executives and risk managers and provides meaningful risk management insights on 15 industry segments, with a detailed overview of the energy sector.
Property damage, weather and natural disasters, availability of capital, and people risk are also high on the agenda of business leaders, with corporate governance and increasing competition rounding out the top 10.
The risks facing Australian energy businesses broadly align with those identified globally through Aon risk surveys in other geographies; although the survey identified two primary differences. Significantly, where cyber security continues to be a key concern in other countries, only 13 per cent of risk managers identified it as a significant concern in Australia.
Similarly, terrorism remains relatively overlooked, indicating Australian companies consider themselves less susceptible in comparison to their international counterparts.
“Changing trading conditions, the weakening of the Australian dollar and the evolving political landscape, aligned with relatively high unemployment and an ongoing skills gap in some of Australia’s most pertinent industry sectors, have presented a challenging risk environment for organisations to try and manage,” Aon managing director global and corporate Jason Disborough said.
“It is, therefore, more critical than ever for organisations to develop efficient and effective risk management solutions, while remaining flexible and responsive to changes in both the local and global economy.
“Without such support it will be impossible for Australian industries to innovate successfully to overcome such challenges.”
In terms of insurers’ attitude towards the energy sector, the survey reported some of the major projects require very large capacity to support them, which can be challenging for certain markets, but is generally available in the current climate.