Allianz: cyber and business interruption continue as top threats

Cyber incidents and business interruption continue to rank as the biggest company concerns for the second year in succession (both with 34% of all responses), according to the Allianz Risk Barometer 2023.

Cyber incidents, such as IT outages, ransomware attacks or data breaches, ranks as the most important risk globally for the second year in succession – the first time this has occurred. It also ranks as the top peril in 19 different countries, among them Canada, France, Japan, India and the UK. It is the risk that small companies (with less than $250mn annual revenue) are most worried about.

The Allianz Risk Barometer is an annual business risk ranking compiled by Allianz Group’s corporate insurer Allianz Global Corporate & Specialty (AGCS), together with other Allianz entities, which incorporates the views of 2,712 risk management experts in 94 countries and territories including CEOs, risk managers, brokers and insurance experts. It is being published for the 12th time.

Other risks are now seen as higher concerns this year: macroeconomic developments such as inflation, financial market volatility and a looming recession (up from number 10 to  number 3 year-on-year), as well as the impact of the energy crisis (a new entry at number 4), are the top risers in this year’s list of global business risks, as the economic and political consequences of the world in the aftermath of Covid-19 and the Ukraine war take hold.

According to Allianz, such pressing concerns call for immediate action from companies, explaining why both Natural catastrophes (from number 3 to  number 6) and climate change (number 6 to number 7) drop in the annual rankings, as does Pandemic outbreak (from number 4 to number 13) as vaccines have brought an end to lockdowns and restrictions.

Political risks and violence is another new entry in the top 10 global risks at number 10, while shortage of skilled workforce rises to  number 8. Changes in legislation and regulation remains a key risk at  number 5, while fire/explosion drops two positions to number 9.

In the UK, Allianz said that the top three risks mirror the global results: cyber, business interruption and macroeconomic developments newly third as the impact of inflation weighs heavily on UK firms after it rose to 10%+ during 2022.  Climate change is the UK’s biggest faller in this year’s rankings down to seventh from third place in last year’s survey.

“For the second year in a row the Allianz Risk Barometer shows that companies are most concerned about mounting cyber risks and business interruption,” said AGCS CEO Joachim Mueller.

“At the same time, they see inflation, an impending recession and the energy crisis as immediate threats to their business. Companies – in Europe and in the US in particular – worry about the current ‘permacrisis’ resulting from the consequences of the pandemic and the economic and political impact from ongoing war in Ukraine. It’s a stress test for every company’s resilience.”

“The positive news is that as an insurer we see continuous improvement in this area among many of our clients, particularly around making supply chains more failure-proof, improving business continuity planning and strengthening cyber controls. Taking action to build resilience and de-risk is now front and centre for companies, given the events of recent years.”

In 2023, the top four risks in the Allianz Risk Barometer are broadly consistent across all company sizes globally – large, medium and small – as well as across core European economies and the US (energy crisis excepted). Risk concerns for businesses in Asia Pacific and African countries show some deviation, reflecting the different impact of the ongoing war in Ukraine and its economic and political repercussions.

Cyber incidents, such as IT outages, ransomware attacks or data breaches, ranks as the most important risk globally for the second year in succession – the first time this has occurred. It also ranks as the top peril in 19 different countries, among them Canada, France, Japan, India and the UK.

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