Business leaders’ concerns about external risks have overtaken inward-looking corporate risk for the first time in the 10-year history of the Aon Australasian Risk Survey.

Paul Venning, MD Corporate for Aon Risk Solutions, says levels of concern increased across all risk categories last year, which was viewed as a riskier year than 2010 thanks to the spate of natural disasters in Australia and New Zealand.

This increasing concern over risk prompted 71% of respondents to undertake a formal review of their insurable risk tolerance levels, he says.

The survey, which was conducted in late 2011, is based on risk management information from 318 Australian and 32 New Zealand companies, with 30% of respondents at CEO, CFO or director level.

It tracks the top 20 risk concerns and measures the costs incurred in delivering risk management strategies.

Brand and image was the most important risk concern for the fifth consecutive year, but the gap between it and the other top five risks was reduced and its average rating also fell for the second year running.

Market environment risk leapt six spots to second, reflecting ongoing concerns about the impact of the global economy and European debt crisis on local businesses.

Mr Venning told insuranceNEWS.com.au that New Zealand respondents ranked natural disasters and business interruption higher than their Australian counterparts, reflecting the enormous impact of the Christchurch earthquakes on the entire country.

The total cost of insurable risk (TCOIR) also increased this year, with the median TCOIR per $1000 of revenue increasing 12% to $5.32, says Aon Risk Solutions Chief Commercial Officer Jason Disborough.

TCOIR is calculated by the sum of the cost of insurance premiums, retained losses below insurance deductibles, external risk management costs such as broker fees and internal risk management costs such as risk staff salaries.

Mr Disborough says the median TCIOR had been dropping since 2003/04 and the increase reflects rising insurance premiums, which were particularly felt by smaller businesses with revenue of less than $100 million, where the median TCOIR almost doubled year-on-year from $6.48 to $12.35 in 2011/12.

Survey respondents reported premium increases of up to 18.84% for 2011, with the largest increases for property and motor vehicle covers.

Premiums are expected to rise further in 2012, with the respondents anticipating average property rate increases of 4.69% in Australia and 13.44% in New Zealand.

QBE was rated the most respected insurer overall, and most respected by organisations with revenues of less than $100 million and between $100 million and $1 billion.

Organisations with revenues in excess of $1 billion rated Lloyd’s as their most respected insurer.