Allianz Risk Barometer survey recently released has shown that Business interruption, Pandemic outbreak and Cyber incidents are the top three business risks for 2021, and all strongly interlinked.
According to the report trio of Covid-19 related risks heads up the 10th Allianz Risk Barometer 2021, reflecting potential disruption and loss scenarios companies are facing in the wake of the coronavirus pandemic.
Business interruption 41 percent responses first ; Pandemic outbreak 40 percent and Cyber incidents 40 percent ranking a close second and third, were revealed in the annual survey on global business risks from Allianz Global Corporate & Specialty (AGCS) incorporates, indicating the views of 2,769 experts in 92 countries and territories, including CEOS, risk managers, brokers and insurance experts.
“The Allianz Risk Barometer 2021 is dominated by the Covid-19 trio of risks. Business interruption, pandemic and cyber are strongly interlinked, demonstrating the growing vulnerabilities of our highly globalized and connected world,” says Joachim Müller, CEO of AGCS.
“The coronavirus pandemic is a reminder that risk management and business continuity management need to further evolve to help businesses prepare for, and survive, extreme events. While the pandemic continues to have a firm grip on countries around the world, we also have to ready ourselves for more frequent extreme scenarios, such as a global-scale cloud outage or cyber-attack, natural disasters driven by climate change or even another disease outbreak.”
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The Covid-19 crisis continues to represent an immediate threat to both individual safety and businesses, reflecting why pandemic outbreak has rocketed 15 positions up to #2 in the rankings at the expense of other risks.
Before 2021, it had never finished higher than #16 in 10 years of the Allianz Risk Barometer, a underestimated risk. However, in 2021, it’s the number one risk in 16 countries and among the three biggest risks across all continents and in 35 out of the 38 countries which qualify for a top 10 risks analysis. Japan, South Korea and Ghana are the only exceptions.
Market developments (#4 with 19 percent) also climb up the Allianz Risk Barometer 2021, reflecting the risk of rising insolvency rates following the pandemic.
According to Euler Hermes, the bulk of insolvencies will come in 2021. The trade credit insurer’s global insolvency index is expected to hit a record high for bankruptcies, up 35 percent by the end of 2021, with top increases expected in the US, Brazil, China and core European countries. Further, Covid-19 will likely spark a period of innovation and market disruption, accelerating the adoption of technology, hastening the demise of incumbents and traditional sectors and giving rise to new competitors.
Other risers include Macroeconomic developments (#8 with 13 percent) and Political risks and violence (#10 with 11 percent) which are, in large part, a consequence of the coronavirus outbreak, too. Fallers in this year’s survey include Changes in legislation and regulation (#5 with 19 percent), Natural catastrophes (#6 with 17 percent), Fire/explosion (#7 with 16 percent), and Climate change (#9 with 13 percent), all superseded by pandemic concerns.
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