CHICAGO, Nov. 24 -- Aon Corporation today announced the findings of a survey of risk managers at 25 of the nation's leading retailers. The survey analyzed risk mitigation practices related to enterprise risk as well as supply chain, network/cyber, environmental, directors and officers, employment practices and business interruption liability, among others.
Nearly one-third of retailers polled in the survey cited that they experience a 76 to 100 percent turnover of store employees annually. This turnover, along with increasing external threats and evolving data security regulation, has led many retailers to increase their focus on cyber risk management. However, 59 percent of those polled do not have a cyber liability insurance policy in place at present. Instead, they have chosen to allocate those resources to loss prevention to thwart potential data breaches.
While sustainability and corporate responsibility programs are prevalent within the retail sector, only 36 percent of survey respondents opt to purchase environmental insurance policies.
"Many retailers have sound risk mitigation practices in place that go well beyond traditional property and casualty insurance programs," said Len Churnetski, managing director of Aon's retail practice. "During the holiday season, where most retailers realize the majority of their annual sales, risk managers face an increasingly heightened and complex risk portfolio. The lack of a mitigation strategy in any of the key retail risk areas creates vulnerabilities that can have a direct impact on revenue."
Throughout the holidays and the calendar year, retailers that import products from overseas vendors experience an increased risk of supply chain disruption and subsequent business interruption. Fifty percent of retailers polled have addressed this exposure through supplier insurance programs while 60 percent disclosed that they maintain business interruption insurance coverage.
On a related topic, 62 percent of survey respondents cited that their organizations possess a dedicated enterprise risk management team. An ERM team enables corporations to oversee business operation risk from a macro perspective.
Data for the study was gathered at a recent Aon symposium on risk issues specific to the retail industry. The assembly included risk managers from 25 major retailers, Aon retail risk experts and a number of large insurance carriers that underwrite risk in the retail sector.