BUSINESS
INTERRUPTION AND DISRUPTION TO SUPPLY CHAINS ARE AMONG THE MAIN GLOBAL RISKS
ORGANIZATIONS WILL FACE IN 2015, ACCORDING TO THE NEW RISK BAROMETER REPORT FROM ALLIANZ.
January 15, 2015
Business interruption and disruption to supply chains
are among the main concerns organizations will face in 2015, according to the
new Risk Barometer report from Allianz.
In a worldwide survey of more than 500 risk managers and
insurance experts within Allianz and other global businesses, supply chain risk
was ranked as a top concern by 46% of respondents. Natural catastrophes (30%)
and fire and explosion (27%) were also ranked as top risks.
Natural catastrophes, such as earthquakes, proved to be
a major concern for the engineering and construction sector. “BI (68%)
continues to be the top risk with manufacturers even more concerned than 12
months ago (60%), driven by the fact that the potential for large claims in
certain sectors such as semiconductor or automotive is increasing,” Allianz
noted.
“Changes in legislation and regulation (33%) remains the
top concern for financial services, reflecting increasing supervisory intervention
around the globe. The shipping sector is concerned about intensified
competition (29%), while theft (47%) worries the transportation industry.”
At 17% and 11% respectively, cyber and political risk
were also considered greater risks this year than previously. Last year, cyber
risk (including both crime and IT failure) ranked 8th, and in 2013, was at No.
15, while this year, it is considered a top five risk.
What’s more, in Germany, the United Kingdom and the
United States, cyber risk was in the top three concerns.
Loss of reputation (61%) and business interruption (49%)
are regarded as the main causes of economic loss following an incident,
according to Allianz.
However, 73% of respondents suggests that companies are
underestimating the impact of cyber breaches, and budgetary constraints remain
a challenge.
“The growing interdependency of many industries and
processes means businesses are now exposed to an increasing number of
disruptive scenario,” Chris Fischer Hirs, CEO of Allianz Global Corporate &
Specialty SE (AGCS), the dedicated insurer for corporate and special risks of
Allianz SE said in a statement on the survey results.
“Negative effects can quickly multiply. One risk can
lead to several others. Natural catastrophes or cyber attacks can cause
business interruption not only for one company, but to whole sectors or
critical infrastructure.”
“Risk management must reflect this new reality.
Identifying the impact of any interconnectivity early can mitigate or help
prevent losses occurring. It is also essential to foster cross-functional
collaboration within companies to tackle modern risks.”