Australian businesses are more optimistic about the economy than their counterparts worldwide, while brand reputation, regulation and innovation pose the biggest threats, according to this year’s Aon Global Risk Management Survey.

Aon Risk Solutions Australia CEO Lambros Lambrou told insuranceNEWS.com.au he is surprised economic slowdown ranks eighth in Australia’s risk top 10 but second globally.

“Despite levels of economic uncertainty across the globe, businesses perceive Australia to be in a financially stable position and are more optimistic about the future,” he said.

“Another result of significance is the shift in the ranking of regulatory and legislative change, which is the No.1 risk in Australia and ranks fourth globally.

“Businesses feel concerned about these changes and what the potential knock-on impact could be for their business.”

Damage to brand and reputation remains a top-three risk, with 45% of respondents naming it a leading concern. About 10% worldwide say they have lost income due to this in the past year.

Mr Lambrou says organisations must be aware of changing perceptions around their brands and be ready to respond to unpredictable, and often unavoidable, crises.

“We have seen many recent cases in the media where scandals, poor customer experience or product recalls have impacted a company’s share price and performance in the short term – and in some cases caused longer-term financial difficulties,” he said.

However, a crisis need not destroy a business’ reputation.

“When handled well, a crisis can actually be a chance to improve brand perception,” Mr Lambrou told insuranceNEWS.com.au. “The increasing influence of social media and activist sites mean that risk and reputational issues can escalate very quickly.”

He says only 51% of global clients have a plan or have reviewed their brand and reputation, compared with two-thirds of Australian respondents.

The top 10 business risks according to Australian respondents are: regulatory and legislative change; damage to brand and reputation; increasing competition; failure to innovate and meet customer needs; cyber crime; major project failure; failure to attract or retain top talent; economic slowdown or slow recovery; business interruption; lack of technology infrastructure.