Cyber risks biggest threat to companies

Cyber perils are the biggest concern for companies in Nigeria, other African countries, the Middle East, and around the world in 2022, according to the recently launched Allianz Risk Barometer.

The report says the threat of ransomware attacks, data breaches, or major IT outages worries companies even more than business and supply chain disruption, natural disasters, or the COVID-19 pandemic, all of which have heavily affected firms in the past year.

Cyber incidents rank as a top three peril in most countries and regions surveyed, including Africa and the Middle East, South Africa, and Nigeria. It also ranks second in Ghana, fourth in Morocco and Namibia, fifth in Kenya and seventh in Turkey, with the main driver being the recent surge in ransomware attacks, which are confirmed as the top cyber threat for the year ahead by survey respondents numbering 57 percent.

Globally, cyber incidents top the Allianz Risk Barometer for only the second time in the survey’s history (44 percent of responses), business interruption drops to a close second (42 percent) and natural catastrophes rank third (25 percent), up from sixth in 2021.

“Climate change climbs to its highest-ever ranking of sixth (17 percent, up from ninth), while Pandemic outbreak drops to fourth (22 percent)”.

The annual survey from Allianz Global Corporate & Specialty (AGCS) incorporates the views of 2,650 experts in 89 countries and territories, including CEOs, risk managers, brokers and insurance experts.

“Business interrupted’ will likely remain the key underlying risk theme in 2022,” AGCS CEO Joachim Mueller summarises. “For most companies, the biggest fear is not being able to produce their products or deliver their services. 2021 saw unprecedented levels of disruption, caused by various triggers. Crippling cyber-attacks, the supply chain impact from many climate change-related weather events, as well as pandemic-related manufacturing problems and transport bottlenecks, wreaked havoc. This year only promises a gradual easing of the situation, although further COVID-19-related problems cannot be ruled out. Building resilience against the many causes of business interruption is increasingly becoming a competitive advantage for companies.”

The report stated that political risks, violence, and changes in legislation and regulation are rising concerns for businesses in Africa and the Middle East. Political risks and violence moved from sixth to fourth due to the number, scale and duration of riots and protests such as civil unrest and looting in South Africa. Changes in legislation and regulation moves up three places for fifth in the region.

Read also: Nigerian businesses suffer 2308 cyber attacks every week

“Fortunately, large-scale terrorism events have declined drastically in the last five years. However, the number, scale and duration of riots and protests in the last two years is staggering and we have seen businesses suffering significant losses,” says Bjoern Reusswig, head of Global Political Violence and Hostile Environment Solutions at AGCS.

“Civil unrest has soared, driven by protests on issues ranging from economic hardship to police brutality which have affected citizens around the world. And the impact of the COVID-19 pandemic is making things worse, with little sign of an end to the economic downturn; the number of protests is likely to continue climbing.”

The report observed, “Preparation is key – in particular for exposed sectors such as retail,” explained Thusang Mahlangu, AGCS Africa CEO.

“Businesses need to review their business continuity plans (BCP) and should be aware of what is happening around them. Typically, this only focuses on national catastrophes, but there is a need for BCP plans to address political disturbances and other types of business disruption like cyber. Having defined, and preferably tested, procedures in place is crucial, and these should include staff, client and general communication and social media plans. It is imperative for companies to think deeply about how they can best protect their assets and people.”

“Ransomware has become a big business for cyber criminals, who are refining their tactics, lowering the barriers to entry for as little as a $40 subscription and little technological knowledge. The commercialisation of cybercrime makes it easier to exploit vulnerabilities on a massive scale. We will see more attacks against technology supply chains and critical infrastructure,” explained Scott Sayce, global head of Cyber at AGCS.

Business interruption (BI) ranks as the second most concerning risk globally and Africa and Middle East, South Africa, Madagascar and Turkey. However, it ranked first in Ghana, Kenya, Morocco and Namibia. In a year marked by widespread disruption, the extent of vulnerabilities in modern supply chains and production networks is more obvious than ever.

According to the survey, the most feared cause of BI is cyber incidents, reflecting the rise in ransomware attacks but also the impact of companies’ growing reliance on digitalisation and the shift to remote working. Natural catastrophes and pandemic are the two other important triggers for BI in the view of respondents.