Business interruption (BI), cyber and natural catastrophes are the leading business risks globally this year, according to more than 1,900 risk experts from 80 countries polled for the latest Allianz Risk Barometer.
However, the survey by Allianz Global Corporate & Specialty (AGCS), reveals that BI and fire or explosion are the leading two risks in Africa, with political risks and violence and market developments in third and fourth places respectively. Natural catastrophes sit in sixth place and cyber remains in fifth.
The seventh Allianz Risk Barometer survey was conducted among global Allianz clients and brokers. It also surveyed risk consultants, underwriters, senior managers and claims experts in the corporate insurance segment at both AGCS and other Allianz entities. It asked respondents to rank the three most pressing risks.
The 2018 survey found that BI, including supply chain disruption, remains the leading global business risk for the sixth year in a row with a score of 42%, up from 37% last year, reflected in it regaining top spot in the African poll.
Other big movers on the global poll include climate change or increasing weather volatility. It was voted the tenth biggest risk in 2018 on 15%, from 14th position and 10% last year. It is the first time this risk has featured in the top ten. Meanwhile, the impact of new technologies rose to seventh position from tenth, with its percentage score increasing to 15% from 10%.
The African picture is a little different. Business interruption has risen from sixth to top spot, while fire or explosions was only at number eight in 2018. Market developments – the top risk last year – has dropped back to fourth and cyber risks have remained at number five.
The other major change in the list this year was on macroeconomic developments, which have dropped from second place in 2016 down to ninth in 2017 – perhaps a sign that people are adjusting to a more unpredictable political and economic landscape globally.
The top ten global risks in 2018:
1 Business interruption (including supply chain disruption) 42% 2017 rank 1 (37%)
2 Cyber incidents (such as cybercrime, IT failure, data breaches) 40% 2017 rank 3 (30%)
3 Natural catastrophes (such as storm, flood, earthquake) 30% 2017 rank 4 (24%)
4 Market developments (such as volatility, intensified competition or new entrants, M&A, market stagnation, market fluctuation) 22% 2017 rank 2 (31%)
5 Changes in legislation and regulation (such as government change, economic sanctions, protectionism, Brexit, eurozone disintegration) 21% 2017 rank 5 (24%)
6 Fire or explosion 20% 2017 rank 7 (16%)
7 New technologies (such as the impact of increasing interconnectivity, nanotechnology, artificial intelligence, 3D printing, drones) 15% 2017 rank 10 (12%)
8 Loss of reputation or brand value 13% 2017 rank 9 (13%)
9 Political risks and violence (such as war, terrorism, civil commotion) 11% 2017 rank 8 (14%)
10 Climate change or increasing volatility of weather 10% 2017 rank 14 (6%)
The top ten Africa risks in 2018:
1 Business interruption (including supply chain disruption) 31% 2017 rank 6 (22%)
2 Fire or explosion 31% 2017 rank 8 (8%)
3 Political risks and violence (such as war, terrorism, civil commotion) 28% 2017 rank 3 (31%)
4 Market developments (such as volatility, intensified competition or new entrants, M&A, market stagnation, market fluctuation) 27% 2017 rank 1 (39%)
5 Cyber incidents (such as cybercrime, IT failure, data breaches) 23% 2017 rank 5 (23%)
6 Natural catastrophes (such as storm, flood, earthquake) 22% 2017 rank 7 (17%)
7 Changes in legislation and regulation (such as government change, economic sanctions, protectionism, Brexit, eurozone disintegration) 21% 2017 rank 4 (26%)
7 Theft, fraud and corruption 21% 2017 rank 9 (14%)
9 Macroeconomic development (such as austerity programmes, commodity price increase, deflation, inflation) 15% 2017 rank 2 (37%)
10 Loss of reputation or brand value 11% 2017 rank 10 (10%)