As businesses brace for a year of uncertainty, cyber risk concerns — driven by impact of indirect attacks, regulatory threats, and technical and employee error in digitalized production environment —rose to number two in the U.S. according to an Allianz Global Corporate & Specialty report. The sixth annual Allianz Risk Barometer identifies the top corporate perils and potential solutions for 2017, based on the responses of more than 1,200 risk experts from more than 50 countries.
The report further found businesses increasingly fear impact of non-physical damages, market uncertainties and political perils; companies greatly fear the impact of rising protectionism and other potential shocks to markets; and business interruption continues to lead risk rankings as new non-physical damage triggers emerge. However, what continues to trouble respondents most are losses from business interruption.
“Companies worldwide are bracing for a year of uncertainty,” says Chris Fischer Hirs, CEO of Allianz Global Corporate & Specialty SE. “Unpredictable changes in the legal, geopolitical, and market environment around the world are constant items on the agenda of risk managers and the C-suite. 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.”
According to the report, increasing reliance on technology and automation is transforming, and disrupting, companies across all industry sectors. Digitalization not only provides companies with new opportunities, it also shifting the nature of corporate assets from mostly physical to increasingly intangible, resulting in new threats like cyber risks.
Across the Americas, fear of BI, cyber incidents, and natural catastrophes are the three major concerns for businesses. “Each of these issues at times may be an unknown or hidden risk exposure, but an exposure that could create potentially both short and long-term consequences to a company’s bottom line,” says Thomas Varney, Regional Manager, Americas, Allianz Risk Consulting. “Understanding of a supply chain exposure requires a partnership between client and carrier.” Fears over macroeconomic developments and the new risk impact of increasing interconnectivity are also rising.