Business interruption (BI) (#1 with 42% of responses / #1 in 2017) and cyber incidents (#2 with 40% of responses, up from #3 in 2017) are this year’s top business risks globally, according to the Allianz Risk Barometer 2018.
BI is the most important risk for the sixth year in a row, ranking top in 13 countries and the Europe, Asia Pacific, and Africa & Middle East regions, the report said. Companies face an increasing number of scenarios, ranging from traditional exposures, such as fire, natural disasters and supply chain disruption, to new triggers stemming from digitalisation and interconnectedness that typically come without physical damage, but with high financial loss.
Larger losses from natural catastrophes (#3 with 30% of responses, up from #4 in 2017) are also a rising concern for businesses, with the record-breaking 2017 disaster year also ensuring climate change and increasing volatility of weather (# 10) appears in the top 10 most important risks for the first time.
Meanwhile, the risk impact of new technologies (#7 2018 / #10 2017) is one of the biggest climbers, as companies recognise innovations such as artificial intelligence or autonomous mobility could create new liabilities and larger-scale losses, as well as opportunities, in future.
Conversely, businesses are less worried about market developments (#4 2018 / # 22017) than 12 months ago.
For the first time, business interruption and cyber risk are neck-and-neck in the Allianz Risk Barometer and “these risks are increasingly interlinked”, said Mr Chris Fischer Hirs, CEO of AGCS.
He said: “Whether resulting from attacks such as WannaCry, or more frequently, system failures, cyber incidents are now a major cause of business interruption for today’s networked companies whose primary assets are often data, service platforms or their groups of customers and suppliers.
“However, last year’s severe natural disasters remind us that the impact of perennial perils shouldn’t be underestimated either. Risk managers face a highly complex and volatile environment of both traditional business risks and new technology challenges in future.”
The key findings of the seventh Allianz Risk Barometer was based on the insight of a record 1,911 risk experts from 80 countries. M