London – 7 February 2005 – The impact of climate change and a growing raft of environmental legislation are set to be two of the fastest growing risks to UK businesses according to Aon’s 2005 Risk Report, which also looks at several other key risk areas from directors’ and officers’ liability, to the global threat of terrorism and the implications of London securing the 2012 Olympic bid.
The study, launched today, explores the impact of the changing climate and finds that UK businesses will face a number of new weather risks, such as the increased risk of flooding, as well as having to deal with new compliance measures designed to mitigate the effect of climate change. In addition, new environmental legislation will require businesses to meet hitherto unseen levels of disclosure around their environmental exposures.
Alongside the risk management issues facing UK companies in the forthcoming year, the report also sets out the major milestones and regulatory measures coming into force that are likely to alter the profile of the market further.
New legislation being introduced, such as the Operating & Financial Review, which aims to improve corporate reporting standards, and the European Energy Trading Scheme, to name but two, will have significant impacts on company balance sheets and the disclosure of potential risk exposure going forward. Such pressures, as well as the more unexpected global events associated with climate change and natural disasters, continue to make the world of risk more unpredictable.
Dennis Mahoney, chairman and chief executive officer of Aon Limited, commented: ”Some risks may appear to be more illusory than real. While this year’s Risk Report is not a crystal ball, it tries to encapsulate some of the risk management issues that we know to be facing UK companies in the coming year. This reflects our belief that if we manage the visible and likely risks, it will put us in a better position to deal with the unforeseen and unpredictable ones.”
Notes to Editors
2005/6 Milestones | |
Compensation Culture | |
1 February | Annual revision of Employment Tribunal Award Limits |
Early 2005 | Publication of DCA study into the impact on the outcome of personal injury claims following the introduction of recoverable success fees and related charges through the Access to Justice Act reforms in April 2000 expected. |
Early 2005 | Health & Safety Executive to publish the results of the consultation it is currently undertaking with approximately 24 organisations in which they are adopting draft management standards on work-related stress. |
15 February 2005 |
New regulations to be introduced pursuant to the 2003 EC Noise at Work Directive. |
1 October 2006 | Regulation will be introduced which will make direct and indirect discrimination on the basis of age (unless objectively justified) unlawful in all employment fields (including vocational training). |
Directors and Officers Liability | |
1 April 2005 | Introduction of the Operating & Financial Review |
15 April 2005 | As a result of Sarbanes-Oxley, all publicly traded companies are required to file an internal control statement. |
Post General Election (May 2005) | Corporate Manslaughter Bill expected to be passed through parliament. |
Environmental Risk | |
14 February 2005 | EU Directive: Public access to environmental information; final date for implementation. |
Q2 2005 |
EU Directive: Control of major accident hazards involving dangerous substances. |
3 August 2005 | EU Directive: Waste electrical and electronic equipment. |
The Olympics | |
February to March 2005 | Visits of the IOC evaluation committee to the candidate cities. |
16-19 February 2005 | an 11 member inspection panel will make a visit to London to examine all aspects of the bid. |
May/June 2005 | The IOC evaluation committee prepares a detailed report summarising the potential of each candidate city based on the inspection visits and bid books. |
6 July 2005 | IOC President Jacques Rogge announces the result of the vote by IOC members on the candidate city to host the 2012 Summer Olympics. |
Climate Change | |
1 January 2005 | The European Union Greenhouse Gas Emissions Trading Scheme (EU ETS) began. |
16 February 2005 | The Kyoto Protocol comes into effect. |
July 2005 | G8 summit to take place at Gleneagles Scotland. The two key themes for the G8 summit are climate change and Africa. |
13 November 2005 | EU Directive: Greenhouse emissions amendment. |
Terrorism | |
July 2005 | G8 Summit takes place. |
31 December 2005 | Expiration of TRIA, US private/government insurance programme introduced post 9/11 to help provide terrorism cover for US companies. |
Political Risks | |
January 2005 | Iraq: presidential/parliamentary elections. |
April 2005 | Afghanistan parliamentary elections |
April 2005 | Chechnya parliamentary elections. |
May 2005 | Iran presidential elections. |
May 2005 | Possible date for UK parliamentary. |
June 2005 | Zimbabwe parliamentary elections. |
About Aon
Aon Corporation (www.aon.com) is a leading provider of risk management services, insurance and reinsurance brokerage, human capital and management consulting, and specialty insurance underwriting. The company employs approximately 52,000 professionals in its 600 offices in more than 120 countries. Backed by broad resources, industry knowledge and technical expertise, Aon professionals help a wide range of clients develop effective risk management and workforce productivity solutions.
This press release contains certain statements relating to future results, which are forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from either historical or anticipated results, depending on a variety of factors. Potential factors that could impact results include the general economic conditions in different countries around the world, fluctuations in global equity and fixed income markets, exchange rates, rating agency actions, resolution of regulatory issues, including those related to compensation arrangements with underwriters, pension funding, ultimate paid claims may be different from actuarial estimates and actuarial estimates may change over time, changes in commercial property and casualty markets and commercial premium rates, the competitive environment, the actual costs of resolution of contingent liabilities and other loss contingencies, and the heightened level of potential errors and omissions liability arising from placements of complex policies and sophisticated reinsurance arrangements in an insurance market in which insurer reserves are under pressure. Further information concerning the Company and its business, including factors that potentially could materially affect the Company’s financial results, is contained in the Company’s filings with the Securities and Exchange Commission.
Aon Limited is authorised and regulated by the Financial Services Authority in respect of insurance mediation activities only.
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