Cyber incidents are top global business risk, Allianz Risk Barometer 2022

A recent study shows cyber incidents, business interruption and natural disasters are the most important global business risks for companies in 2022, according to the Allianz Risk Barometer 2022.

For only the second time in the report's 11 year history, cyber incidents sit at the top with 44% of respondents. Cyber incidents include cybercrime, IT failure and data breaches. The Allianz Risk Barometer from Allianz Global Corporate & Specialty identifies risks for the next 12 months and beyond, based on insights from 2,650 respondents from 89 countries and territories including executives, risk managers, brokers and insurance experts.

Business interruption was second at 42% and natural catastrophes ranked third with 25%, up from sixth place in 2021. Cyber incidents are the most feared type of business interruption and building resilience against the various causes is increasingly important to companies, according to the survey. Ransomware events will likely be the top cyber threat this year and such trends as exploiting software vulnerabilities could affect thousands of companies.

Joachim Mueller, CEO of AGCS said in a statement that most companies fear not being able to produce products or deliver services.

“2021 saw unprecedented levels of disruption, caused by various triggers,” Mueller said. “Crippling cyber attacks, the supply chain impact from many climate change-related weather events, as well as pandemic-related manufacturing problems and transport bottlenecks wreaked havoc. This year only promises a gradual easing of the situation, although further COVID-19 related problems cannot be ruled out. Building resilience against the many causes of business interruption is increasingly becoming a competitive advantage for companies.”

Business interruption is expected to remain the key underlying risk theme in 2022, Mueller added.

Additionally, the COVID-19 pandemic, despite moving to the fourth spot with 22% of respondents, remains a concern. The survey was conducted prior to the recent surge in hospitalizations and cases related to the Omicron variant but the majority of respondents, 80%, do believe they are prepared for future pandemic-related challenges.

The rise of natural catastrophes and climate change in the report shows the increase in awareness around and severity of global warming weather events. Respondents are most concerned about weather-related events causing damage to corporate property, business interruption and supply chain impact.

“The pressure on businesses to act on climate change has increased noticeably over the past year, with a growing focus on net-zero contributions,” said Line Hestvik, chief sustainability officer at Allianz SE, in a statement. “There is a clear trend for companies towards reducing greenhouse gas emissions in operations or exploring business opportunities for climate-friendly technologies and sustainable products. In the coming years, many corporate decision-makers will be looking even more closely at the impact of climate risks in their value chain and taking appropriate precautions. Many companies are building up dedicated competencies around climate risk mitigation, bringing together both risk management and sustainability experts.”