Cyber perils are the biggest concern for companies globally over the next 12 months, followed by business interruption and natural disasters.
That is according to the Allianz Risk Barometer 2022, which is based on insights from 2,650 risk management experts across 89 countries and territories.
Cyber incidents top the annual risk ranking for only the second time its history, driven by a recent surge in ransomware attacks.
Indeed, the most feared cause of business interruption is cyber incidents, reflecting the impact of companies’ growing reliance on digitalisation and shift to remote working.
Natural catastrophes and pandemic are the two other important triggers of business interruption feared by risk management experts.
“'Business interrupted’ will likely remain the key underlying risk theme in 2022,” said Joachim Mueller, CEO at Allianz Global Corporate & Specialty (AGCS). “For most companies the biggest fear is not being able to produce their products or deliver their services.
“2021 saw unprecedented levels of disruption, caused by various triggers. Crippling cyber attacks, the supply chain impact from many climate change-related weather events, as well as pandemic-related manufacturing problems and transport bottlenecks wreaked havoc.
“This year only promises a gradual easing of the situation, although further COVID-19-related problems cannot be ruled out. Building resilience against the many causes of business interruption is increasingly becoming a competitive advantage for companies.”
Climate change climbs to its highest-ever ranking of sixth position in Allianz's risk barometer, while pandemic outbreak drops to fourth.
While the COVID-19 crisis continues to overshadow the economic outlook in many industries, businesses appear to feel they have adapted well.
Eight out of 10 experts surveyed for the research think they are adequately or well-prepared for a future incident. Improving business continuity management is the main action companies are taking to make them more resilient.
The rise of natural catastrophes and climate change to third and sixth position in the ranking is telling, with both upwards trends closely related.
Recent years have shown the frequency and severity of weather events are increasing due to global warming. For 2021, global insured catastrophe losses were well in excess of $100bn (£74bn) – the fourth highest year on record.
“There is a growing willingness among top management to bring more transparency to supply chains with organisations investing in tools and working with data to better understand the risks and create inventories, redundancies and contingency plans for business continuity,” said Maarten van der Zwaag, global head of property risk consulting at AGCS.
“Previous once-in-a-century-events may well occur more frequently in future and also in regions which were considered ‘safe’ in the past. Both buildings and business continuity planning need to become more robust in response.”
Image credit: iStock
Author: Chris Seekings