Cyber and BI risks are increasingly interlinked as ransomware attacks or accidental IT outages often result in disruption of operations and services, costing hundreds of millions of dollars, warn AGCS on the launch of its Risk Barometer 2019
Cyber risks are neck-and-neck with business interruption as the top risks for business across Europe.
In the wake of mega data breaches and privacy scandals, significant IT outages and the introduction of tighter data protection rules in the European Union and other countries, cyber risk is now a core concern for businesses in 2019 and beyond.
According to the Allianz Risk Barometer 2019, Cyber incidents (37% of responses) are neck-and-neck with Business interruption (BI) (37% of responses) as the top business risks globally.
Climate change (#8 with 13% of responses) and shortage of skilled workforce (#10 with 9% of responses) are the biggest climbers globally. At the same time, companies are more worried year-on-year about changes in legislation and regulation (#4 with 27% of responses) resulting in impacts such as Brexit, trade wars and tariffs.
The annual survey on global business risks from Allianz Global Corporate & Specialty (AGCS) incorporates the views of a record 2,415 experts from 86 countries including CEOs, risk managers, brokers and insurance experts.
“Companies need to plan for a wide range of disruptive scenarios and triggers, as this is where their big exposure lies in today’s networked society,” says Chris Fischer Hirs, CEO of AGCS.
“Disruptive risks can be physical, such as fire or storms, or virtual, such as an IT outage, which can occur through malicious and accidental means. They can stem from their own operations but also from a company’s suppliers, customers or IT service providers. Whatever the trigger, the financial loss for companies following a standstill can be enormous. New risk management solutions, analytical tools and innovative partnerships can help to better understand and mitigate the modern myriad of BI risks and prevent losses before they occur.”
BI threats continue to evolve
BI remains the top threat for businesses worldwide for the seventh year running and is the top risk in countries such as the US, Canada, Germany, Spain, Italy and China.
Potential BI scenarios are becoming ever more diverse and complex in a globally connected economy, including breakdown of core IT systems, product recalls or quality issues, terrorism or political rioting or environmental pollution.
Both cyber and BI risks are increasingly interlinked as ransomware attacks or accidental IT outages often result in disruption of operations and services costing hundreds of millions of dollars. Cyber incidents rank as the BI trigger most feared by businesses (50% of responses), followed by fire (40%) and natural catastrophes (38%). At the same time, BI is seen as the biggest cause of financial loss for businesses after a cyber incident (69% of responses).
Cyber – growing awareness, growing losses
Increasing concern over Cyber incidents follows a watershed year of activity in 2018. “Cyber risk has been a major risk for a number of years, but as with any new risk it has struggled with awareness,” explains Marek Stanislawski, Deputy Global Head of Cyber, AGCS. “We have now reached a point where cyber is as equally concerning for companies as their major traditional exposures.”
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