The top three risks facing businesses over the next year are all related to COVID-19, an annual survey of CEOs, risk managers, brokers and insurance experts by Allianz has found.
The Allianz Risk Barometer 2021 – which gathered views from 2,769 experts in 92 countries and territories – suggests that the top risks for this year are business interruption, pandemic outbreak and cyber incidents.
All these risks are strongly interlinked, and reflect the potential disruption and loss scenarios companies are facing in the wake of the coronavirus crisis.
This is the first time that pandemic outbreak has finished higher than 16th place in the 10 years that Allianz has been carrying out the survey. It’s now the number one threat in 16 countries, and among the three biggest risks across all continents.
“The coronavirus pandemic is a reminder that risk management and business continuity management need to further evolve in order to help businesses prepare for, and survive, extreme events,” said Joachim Müller, CEO of Allianz Global Corporate & Specialty (AGCS).
“While the pandemic continues to have a firm grip on countries around the world, we also have to ready ourselves for more frequent extreme scenarios, such as a global-scale cloud outage or cyber attack, natural disasters driven by climate change, or even another disease outbreak.”
Market developments have also climbed up the ranking this year to fourth position, reflecting the risk of rising insolvency rates following the pandemic.
Other risers include macroeconomic developments, and political risks and violence, which are now in eighth and tenth position respectively.
Fallers in this year’s survey include changes in legislation and regulation, natural catastrophes, and climate change, which are in fifth, sixth and ninth position respectively, all clearly superseded by pandemic concerns.
“Many companies need to adjust their business for a low-carbon world – and risk managers need to be at the forefront of this transition,” said Michael Bruch, global head of ESG at AGCS. “With the vaccination campaign coming into effect, climate change will be back on the board agenda as a priority in 2021.”
Image credit: iStock
Author: Chris Seekings