Puerto Rico businesses are “aware about the need to protect their most important assets” should some natural or induced event arise that could affect their operations, a study released Thursday by Aon plc, a risk management, brokerage, reinsurance, and human resources consulting and outsourcing services firm.
In its first “Annual Report: Market Risks in Puerto Rico” survey, the company established formal measurements of property risk management and contingency in the local market, to help entrepreneurs have a better understanding of marketing behavior.
The report included the participation of a workforce of about 13,000 employees from various industries such as: food (from restaurants to agriculture), information technology, health, automotive, law, entertainment, and education, among others.
The findings revealed that 90 percent of participating companies have coverage in public liability, property, and business interruption. Nevertheless, the facts indicate that the market has suffered, in terms of costs, a reduction from 25 percent to 50 percent over the last five years.
“At Aon we focus on providing tools that allow our customers to protect their businesses and identify a plan to minimize their exposure to potential risks. Because of this we established in Puerto Rico a market risk study that keeps leading-edge information updated annually, to protect companies,” said Manuel Bermúdez, president of Aon PR.
The results project that the value that organizations place on the expertise of the brokers or companies that determine their coverage limits and sources of data collection for risk management, increases constantly. Likewise, the significance of the risk officer, who is responsible for managing the risks of an organization, has also gained importance.
Ninety-six percent of companies stated they were confident in the limits and coverage of their insurance programs, whose blueprint is designed by their broker or insurance agent. However, this trust could be put at risk if it not sustained by updated data, Aon executives said.
“It is recommended, on an industry level, that insurance policies be evaluated and updated annually due to factors such as inflation, construction improvements, sales growth, and new products of business lines, that could affect the limits and coverages of a business plan,” said Rafael Diaz, manager of Aon PR placements.
The companies that participated in this study were in agreement in regard to risk management as a practice that offers multiple benefits to a business. According to the responses, the major benefit of this exercise is the reduction in compliance costs (77 percent), followed by the ability to make educated decisions about retention risks, and improved business continuity planning, each with 52 percent.
Meanwhile the average company’s product claims, showed that on an annual basis most claims focus on public accountability policies (61 percent), followed by complaints auto insurance policies (12 percent) and professional liability (23 percent.)