Whilst many businesses do their best to survive in a Covid world, business interruption, caused by a multitude of factors, seems to be the underlying theme for 2022. Allianz has released a 2022 Risk Barometer Report which incorporates the views of customers, brokers, and industry trade organisations from around the world regarding the tops risks they believe to be most important. Let’s dive into the top 5 global business risks as anticipated by the survey’s respondents.
1. Cybercrimes
In Australia, cyber risks sit at the number one spot of the country’s top concerns alongside Japan, Italy and the UK. Cyberattacks are becoming more advance and frequent, especially with remote working arrangements being the new norm. The growing dependency on digital infrastructure across various industries has allowed hackers to become more creative in their attempts to exploit new vulnerabilities. Businesses need to take proactive measures to ensure they reduce their cyber risk and increase their organisation’s resilience against modern ransomware technology.
2. Business Interruption
Since the pandemic hit, businesses have experienced an on-again, off-again relationship with their operations, causing significant disruptions to cash flow and the viability of the business. Unfortunately, the past 18 months have shown us that business interruption and its risks are likely to remain a trending issue for the foreseeable future. If anything, the pandemic has revealed how fragile and complex modern supply chains are and how multiple events can cause a domino effect of problems, as what we’ve seen with retail supermarkets in terms of supply and labour shortages.
However, despite the hard hit of Covid-19 on supply chains, the report by Allianz shows the most worrisome cause of business interruption is cyberattacks, particularly with the rise of new ransomware, dependency on digital tools, and remote working arrangements.
3. Natural Catastrophes
Natural disasters have jumped up three spots since last year’s Risk Barometer. Around the world, the frequency and severity of catastrophic weather events are rising due to the effects of global warming. They have led to over $100 billion losses – the fourth-highest year on record. Insurers have paid out a whopping sum of over $8.9 billion in natural disaster claims in Australia alone.
4. Pandemic Outbreak
The outbreak of Covid-19 was an eye-opener for everyone as to how vulnerable and unprepared businesses were in response to a pandemic event. Two years on and with the world opening again, we still can’t rule out the possibility of a more serious variant emerging, causing further disruptions and imposed government restrictions. While most survey respondents believe they are better prepared in their contingency plans, the heavy reliance on digitalisation opens up vulnerabilities that businesses may not be aware of yet and should seek measures in the event of a digital compromise.
5. Fire
This event alone is devastating enough, but it’s not just damage to property and stock that are classified as losses. For over five years until the end of 2018, fire/explosion was the largest single cause of loss for businesses worldwide, as recorded in Allianz’s Risk Barometer. Beyond material losses, fire can prevent businesses from managing their daily operations and reaching their customers for an extended period. The risk of fire is hard to eradicate, but businesses can take action by reviewing their fire mitigation strategies. An effective post-disaster contingency plan can decrease the risk of loss from an incident.
At East West Insurance Brokers, our team of brokers are able to provide your business with a free risk assessment and develop a unique risk profile just for you. This will help you identify the areas within your business to mitigate potential risks and threats. We’ll work with you to implement a suitable insurance plan designed for your industry. Get in touch with the team today, and let’s see how we can help!
1800 809 132 | hello@ewib.com.au | www.ewib.com.au
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