Allianz Risk Barometer 2022: Cyber Threats Overtake Covid-19 in Ranking for Biggest Global Business Risks
• According to the 11th Allianz study in 2022, the three biggest business risks worldwide are cyber threats, business disruption and natural disasters.
• The pandemic falls from second to fourth position as most companies feel prepared for future developments. Natural disasters and climate change rise significantly in the annual ranking with the increase of extreme weather events.
• For Bulgaria, local experts identify the pandemic, business disruption and macroeconomic development of the country as the three biggest risks.
Cyber threats are the biggest concern for companies globally in 2022, according to this year's Allianz Risk Barometer. The threat of cyberattacks to ransom, data leaks or major disruptions to IT infrastructure worries companies even more than business disruptions, supply chain disruptions, natural disasters or Covid-19 - factors that have hit businesses hard in the past year.
The Allianz Global Corporate & Specialty (AGCS) annual survey includes the opinions of 2,650 experts from 89 countries and regions, including CEOs, risk managers, brokers and insurance experts. Cyber incidents top the list with 44% of responses, business downturns fall to second place from last year's edition by 42 percent, and natural disasters rank third with 25 percent, compared to sixth in 2021. The pandemic spread falls to fourth position (22%), and climate change climbs to its highest ever ranking - sixth place (17%).
“For most companies, the biggest threat is that they will not be able to produce their products or provide their services. In 2021, we have seen unprecedented disturbances caused by various factors, and this year promises only a gradual alleviation of the situation. Building resilience to the many causes of business disruptions is increasingly becoming a competitive advantage for companies,” said Joachim Müller, CEO of AGCS.
The full ranking of global and local risks can be viewed here.
For Bulgaria, experts identify the pandemic (38%), business disruption (33%) and the country's macroeconomic development (29%) as the three biggest risks. “For local businesses, health problems related to Covid-19 continue to be the greatest threat to business and the workforce and generate hazards and disruptions in supply chains. The changing political environment, financial policy and rising prices are also worrying factors,” said Ioannis Kotsianos, CEO of Allianz Bulgaria Holding.
The number and complexity of cyber attacks and cybercrime are increasing and this is the main reason why they are listed as the biggest risk for global business. The main driver is the recent jump in ransom attacks, which are confirmed as the biggest cyber threat for next year by respondents (57%). Recent attacks have shown alarming trends such as “double blackmail” tactics, combining encryption of systems with data breaches; exploiting vulnerabilities in software that potentially threaten thousands of companies or affect infrastructure systems. Respondents acknowledge the need to build resilience and plan to address potential disruptions or new requirements from regulators, investors and other stakeholders.
According to the study, cyber attacks are also the biggest risk for business interruption. In a year of severe disruption, vulnerabilities in modern supply chains and production networks are more apparent than ever. The impact of companies' growing dependence on digitalization and the shift to telecommuting is also of concern to experts. Natural disasters and pandemics are the other two important risks of business disruption. Over the past year, leaps in demand after the lockdown have been combined with production and logistics disruptions as Covid-19 outbreaks in Asia have closed factories and caused record levels of congestion in container ports.
The pandemic falls from second to fourth, but remains a major concern for companies. Although the Covid-19 crisis continues to overshadow the economic outlook in many industries, encouragingly, businesses feel they have adapted. The majority of respondents (80%) believe that they are adequate or well prepared for future events.
Regarding the risk of natural disasters and climate change, recent years have shown that the frequency and severity of meteorological phenomena are increasing due to global warming. Respondents to the Allianz Risk Barometer 2022 are most concerned about meteorological phenomena related to climate change, causing damage to corporate property (57%), followed by the impact on business disruption and supply chain (41%). However, they are also concerned about managing the transition to a low-carbon economy (36%), complex regulatory and reporting requirements and the potential risks of litigation for failing to take adequate action to tackle climate change (34%).
The shortage of skilled labor is a new addition to the top 10 positions in the rankings. Attracting and retaining staff has never been a greater challenge, especially for the engineering, construction, real estate, public services and healthcare and transport sectors.
/Allianz Bulgaria Press Release
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