CHICAGO, Dec. 17, 2010 /PRNewswire/ -- According to Aon Risk Solutions, the global risk management business of Aon Corporation (NYSE: AON), consumer confidence in the retail industry is rising, up almost 20 percent since 2009.
Aon's 2010 U.S. Retail Industry Report, along with survey results from Aon's 2010 Retail Symposium, named the economy as the industry's number one risk in 2010, and found that many retailers will focus on growth in 2011. Findings from both reports were released today.
U.S. retailers cited their top five risks as the economy, reputation risk, supply system disruption, liability risk and major business interruption. As expected, the economic slowdown brought reduced consumer spending in 2010. On top of that, the industry experienced an influx of product recalls and weather events, translating into reputation damage, supply chain disruption and business interruption for many retailers.
Retailers are looking at 2011 as a year of growth. This top priority is closely followed by the objectives to increase profitability, control costs, provide business continuity and stabilize operations. To successfully achieve these goals, risk managers must assume greater roles within their organizations. In fact, 80 percent of retailers at Aon's Retail Symposium this fall expect the responsibility and accountability of the risk management function to grow in the coming year.
Also in 2011, the U.S. retail sector is expected to perform in line with the overall economy, according to Aon's Retail Industry Report. However, employment in the retail sector has fallen seven percent since August 2007 and 0.3 percent since August 2009. By way of comparison, total employment in the U.S. has fallen five percent since August 2007 and grown 0.2 percent since August 2009. The economy's effect on consumer spending has taken a significant toll – from sales to employment – across all industries, including retail, according to Bloomberg.
"The retail industry is still recovering from the economic slowdown, but our industry report and symposium findings confirm that growth is just around the corner," said Len Churnetski, chief operating officer of Aon Risk Solutions' national casualty brokerage.
"In 2011, nearly 60 percent of all retail HR departments are expecting the same or higher conversion rates of seasonal employees to full-time employees compared to 2010," said Patrick Tomlinson, senior vice president for Aon Hewitt. "This conversion rate is typically a good indicator of retailers' expectations for the new year."
Churnetski added: "As 2010 comes to a close, Aon's findings will help retail business leaders identify their risks as well as solutions for a successful year."
Aon's 2010 U.S. Retail Industry Report, authored by Aon Analytics, noted that the retail industry remains stable to competitive in terms of insurance coverage provided and policy enhancements available, including workers' compensation, general liability and property. Pricing for casualty insurance has remained flat and directors' and officers' liability coverage has experienced a decrease of 12.5 percent over 12 months between Q2'09 and Q2'10.
For more information on these trends, visit http://aon.com/retail.
The 2010 U.S. Retail Industry Report is based on data from Aon GRIP, 2010 Global Enterprise Risk Management Survey, 2009 Global Risk Management Survey, 2009 Global Risk Technology Survey and additional proprietary databases. Respondents from Aon's Retail Symposium included risk managers from 27 of the leading retail companies. The symposium offers Aon's clients the opportunity to meet with retail industry risk management peers to formulate plans and further improvements at their companies while strengthening relationships with additional professionals in the retail industry.
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Aon Corporation (NYSE: AON) is the leading global provider of risk management services, insurance and reinsurance brokerage, and human resource consulting and outsourcing. Through its more than 59,000 colleagues worldwide, Aon unites to deliver distinctive client value via innovative and effective risk management and workforce productivity solutions. Aon's industry-leading global resources and technical expertise are delivered locally in over 120 countries. Named the world's best broker by Euromoney magazine's 2008, 2009 and 2010 Insurance Survey, Aon also ranked highest on Business Insurance's listing of the world's insurance brokers based on commercial retail, wholesale, reinsurance and personal lines brokerage revenues in 2008 and 2009. A.M. Best deemed Aon the number one insurance broker based on revenues in 2007, 2008 and 2009, and Aon was voted best insurance intermediary 2007-2010, best reinsurance intermediary 2006-2010, best captives manager 2009-2010, and best employee benefits consulting firm 2007-2009 by the readers of Business Insurance. Visit http://www.aon.com for more information on Aon and http://www.aon.com/unitedin2010 to learn about Aon's global partnership and shirt sponsorship with Manchester United.
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