According to the 6th Annual Allianz Risk Global Barometer, the impact of business interruption (incl. supply chain disruption), market developments (volatility, intensified competition/new entrants, M&A and market stagnation), cyber incidents (cybercrime, IT failure, data breaches), natural catastrophes and changes in legislation and regulation (government change, economic sanctions, protectionism, etc.) are the major risks occupying the attention of companies at the start of 2017.
For many of our readers, the emphasis on business interruption may not come as any big surprise – especially since business interruption (BI) has been cited as the top risk now for the fifth year in a row.
The Allianz Report
This report by the Allianz Risk Group, had a record 1,237 respondents from a total of 55 countries. The methodology of this report was rather interesting in that it allowed multiple answers for up to two industries. Participants were asked to select industries about which they are particularly knowledgeable and name up to three risks they believe to be of most importance.
This methodology and approach generated 4,679 answers where the following break-outs were delivered:
- 2,325 (50%) answers from large enterprises (i.e. over U.S. $520 million)
- 1,275 (27%) from small enterprises (i.e. below U.S.$260 million)
- 1,079 (23%) from mid-sized enterprises (i.e. between U.S. $261 to $520 million)
In addressing this business interruption issue, the report is also quick to point out that over the years, evidence is pointing to the fact that a shift in BI is occurring and it is imperative that risk managers become aware of the dynamics of that shift and how those changes potentially can affect their own organizations.
As one might guess, the results of this report also show that increasing digitization and deployment of new technologies are also impacting existing business models and industry risk profiles.
The top ten global business risks according to the Allianz Risk Barometer are:
- Business interruption: 37 percent of organizations list this as a top risk – down from 38 percent last year.
- Market developments: 31 percent (34 percent last year)
- Cyber incidents: 30 percent (28 percent last year)
- Natural catastrophes: 24 percent (24 percent last year)
- Changes in legislation and regulation: 24 percent (24 percent last year)
- Macroeconomic developments: 22 percent (22 percent last year)
- Fire, explosion: 16 percent (16 percent last year)
- Political risks and violence: 14 percent (11 percent last year)
- Loss of reputation or brand value: 13 percent (18 percent last year)
- New technologies: 12 percent (10 percent last year).
If you are interested in seeing this Allianz Risk Barometer listing of topics according to region, CLICK HERE.
”Companies worldwide are bracing for a year of uncertainty,” says Chris Fischer Hirs, the CEO of AGCS. ”Unpredictable changes in the legal, geopolitical and market environment around the world are constant items on the agenda of risk managers and the top management. A range of new risks are emerging beyond the perennial perils of fire and natural catastrophes which require re-thinking of current monitoring and risk management tools.”
To read the full report, CLICK HERE.