Allianz Global Corporate & Specialty recently released its results on the top business risks for companies around the world after conducting a survey of 1,911 risk experts from 80 countries. Topping this year’s list: business interruption (42%), cyber incidents (40%), and natural catastrophes (30%). Cracking the top 10 for the first time was climate change and risks associated with increased weather volatility (10%). Among U.S.-based respondents, the top risk was the threat of a cyber incident (45%), the first time since the survey has been conducted it was ranked the biggest danger.
“Cyber incidents are now a major cause of business interruption for today’s networked companies whose primary assets are often data, service platforms or their groups of customers and suppliers,” said Chris Fischer Hirs, chief executive officer, Allianz Global Corporate & Specialty. “Last year’s severe natural disasters remind us that the impact of perennial perils shouldn’t be underestimated either.”
According to Allianz, business interruption ranks as the most important global risk for the sixth year in a row due to its significant effect on revenues. Companies face an increasing number of scenarios, cites the Allianz report. This includes traditional exposures, such as the physical damage impact of natural catastrophes and fires on facilities and the supply chain to new triggers stemming from digitalization and interconnectedness that typically come without physical damage, but high financial loss. Cyber incidents are the most-feared business interruption trigger for the first time.
Record-breaking insured losses in 2017 reached $135 billion from natural catastrophes that included Hurricanes Harvey, Irma and Maria and the California wildfires among other disasters around the world. Businesses are concerned that the level of natural catastrophe disasters we’ve experienced in the last year could portend the severe weather to come, putting climate change on the list of top 10 risks, said the Allianz report.
Other top risks as listed in the Allianz survey stem from market developments (M&As, for example); legislation and regulatory changes (protectionism and global trade agreements); fire, explosion; new technologies (and the growing cyber exposures as a result); loss of reputation or brand value (health and safety incidents, product recalls and data security breaches); and political risks and violence.
In addition to the risks cited in the Allianz survey, workplace class-action lawsuits are also on the rise. Law firm Seyfarth Shaw found the monetary value of settlements in these types of cases was $2.7 billion in 2017, an increase of about $970 million from 2016.
RPS, provides a portfolio of insurance coverages and industry-specific solutions to help businesses address the various risks they face – from Commercial Property and Business Interruption to Cyber Liability, Flood, and Employment Practices Liability insurance.