AON’s risk map shows growing complexity and magnitude of risks

The overall level of global political risk decreased in 2006, but the magnitude and complexity of risks faced by companies around the world is increasing, according to AON’s Political & Economic Risk Map.
Of the 214 countries surveyed, 15 countries pose less of a risk in 2007 compared to 2006, marking the first decrease in the overall level of global political risk in 3 years.
But, the survey also found that companies’ greater reliance on overseas sourced goods, with increasingly tighter ‘just-in-time’ production demands, means that companies’ global supply chains are under threat from political and non-political trade disruption risks such as embargoes and pandemics.
“The magnitude and complexity of risk is increasing for companies around the world,” said Bryan Squibb, AON U.S. Trade Credit national managing director.
“In addition the same companies are facing increased scrutiny both internally and externally.”
Corporate governance and reputational risks have grown severe, he added.
The risk map shows general political risks in 214 countries and takes into account specific risks such as: strike, riot, terrorism and war risks; sovereign default risk; economic and credit risk; supply chain vulnerability; legal and regulatory risk and political interference; and exchange transfer problems.