Businesses need to shift their mindsets around being prepared for risk, according to Greg Case, Aon’s chief executive officer in a recent interview.
In its new survey, Aon found that in order to succeed in the current climate, businesses need to focus on four critical priorities, navigating new forms of volatility, rethinking access to capital, building a resilient workforce and addressing the underserved.
In the interview, Case also noted that businesses will also need to develop their expertise to make better decisions on how to avoid or mitigate the risks which they may face.
“We found business leaders have a renewed confidence in the economy and a greater appetite to embrace calculated risks,” he said.
“We are at an inflection point where businesses are not only focused on overcoming the current challenges we are facing, but shifting to think about other long-tail risks and how to prepare for them.”
Case noted that as leaders look at the future of their businesses in an increasingly volatile world, the pandemic continues to reshape their views of risk and sharpens their need to make better decisions.
“The past year has given leaders the insight they need to understand the dynamics of long-tail risks and the need to be better prepared, giving them the confidence and certainty they need to make better decisions.”
When taking climate change into the equation, Case believes that it’s not just an issue of science or weather, or catastrophes, it’s one of people.
He explained that it’s an issue in which the communities that most vulnerable to the consequences of climate change will no doubt bear the brunt if reinsurers fail to act collectively now.
“Private capital has a role to play in addressing public risks associated with volatility and scale that we’re just starting to see today. The question is, how do we build investment momentum? And how do we spur the innovation that comes with it to mitigate volatility?” he noted.
He explored how private market activity will have the greatest impact by partnering with the public, social and multilateral sectors.
“From Aon’s view, the business imperative is not about spending more time trying to optimize a limited market, but in creating net new investment capacity. And this is not a concept, we’ve proven that matching private capital with public interest is viable.”
Going forward, Case believes it is essential that the industry must include how we create the incentives to do this everywhere around the world at a level of investment that will materially advance technology, encourage companies to take action and accelerate the path to zero carbon.
