Allianz Risk Barometer 2017 shows that companies worldwide are bracing themselves for a year of increased uncertainty, driven by growing concerns over political, legal and regulatory developments around the globe. Cyber concerns and natural catastrophes remains high on the agenda. But what troubles businesses the most are actual or anticipated losses from a business interruption.
The top three risks worldwide are:
- Business interruption
- Market developments
- Cyber Incidents
Business interruption is the top risk for the fifth year in succession, but new triggers that cause the interruption continue to emerge. Perils such as natural catastrophes and fires are the causes businesses fear most, but the nature of the risk is shifting increasingly towards non-damage events. A cyber incident or the indirect impact of an act of terrorism or political violence are events that can result in large losses without causing physical damage. More of these types of events are expected to occur in future.
Companies will need to invest more resources into better monitoring of politics and policy-making around the world to anticipate, and adapt to, any sudden changes of rules that could impact business models and markets. This comes amid fears of increasing protectionism and anti-globalization, which could produce a business interruption threat of a different kind.
Market developments ranks as the second top risk for businesses overall but the top perils vary by industry sector. Increasing reliance on technology and automation is transforming, and disrupting, companies across all industry sectors. Digitalization is shifting the nature of corporate assets from mostly physical to increasingly intangible, producing new risks as well as benefits.
For the fourth year in succession businesses are more concerned about cyber incidents. The threat now goes far beyond hacking and privacy and data breaches, although new data protection regulations will exacerbate the fall-out from these events for businesses. Technical IT failure or human error can also result in costly damages. The digitalized production means failure to interpret or submit data correctly can halt production.
The sixth annual Allianz Risk Barometer was conducted among 1,237 respondents from a total of 55 countries. Respondents were questioned during October and November 2016. The survey focused on large and small to mid-sized companies. Respondents were from the following organizations:
- Large enterprises (over €500m/$520m revenue) [2,325 responses, 50%].
- Mid-sized enterprises (€251m to €500m revenue) produced 1,079 responses (23%).
- Small enterprises (below €250m revenue) contributed 1,275 responses (27%)
Download the report to view the total top ten and compare to your risk profile. Share with your executives and use as a tool for designing exercises.