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Price volatility, weather/natural disasters and product recalls are the leading industry risks facing the food system, agribusiness and beverage industries, according to a recently released risk management report by Chicago-based Aon Corp. probing emerging issues, key challenges and opportunities.
Comprising three main components -- risk, clients, and market insights -- the report finds that many firms aren’t prepared to deal with increasing regulation such as tougher food safety laws, and that many lack comprehensive risk management processes, opting instead to rely on senior management intuition and experience as primary methods for identifying major risks.
“Companies in the U.S. food system are faced with more complex risks today than ever before, and it is vital for them to fully understand these exposures so they can make informed and insightful decisions,” said Rick Shanks, national managing director of Aon’s food system, agribusiness and beverage practice.
Insurance pricing, food system, agribusiness and beverage organizations have generally been experiencing rate decreases for casualty, property, and directors’ and officers’ liability coverage, said Shank, although property rates have shown some hardening in 2009, a function, he notes, of the market’s realization of cumulative loss events and the overall economic slump. While the industry has largely enjoyed higher-than-average rate decreases for directors’ and officers’ liability coverage, the report forecasts a trend toward flat renewals or even slight increases over the next year.
Aon’s “2009 U.S. Food System, Agribusiness and Beverage Industry Report” is based on data from the company’s 2009 Global Risk Management Survey, the Aon Global Risk Insight Platform and additional proprietary databases in the United States from November 2008 through mid-year 2009.
To access Aon’s 2009 U.S. Food System, Agribusiness and Beverage Industry Report, visit http://www.aon.com/foodindustryreport.