Business interruption/supply chain risks and natural catastrophes head the list of companies' top risk concerns, with cyber risk and reputational risk finding their way into the top 10 U.S. risk concerns for the first time in Allianz Global Corporate & Specialty S.E.'s 2014 Allianz Risk Barometer report.
The top 10 global business risks in the Allianz survey, in order, are: business interruption and supply chain risk; natural catastrophes; fire and explosion; changes in legislation or regulation; market stagnation or decline; loss of reputation or brand value; intensified competition; cyber crime, information technology failures or espionage; theft, fraud or corruption; and quality deficiencies or serial defects.
While the top four risks cited in the survey of more than 400 corporate insurance experts from 33 countries held the same positions in last year's study, market stagnation or decline climbed three spots from last year, while loss of reputation or brand value climbed four spots and cyber crime and IT failures climbed seven spots from their 2013 positions.
Survey respondents from U.S. companies listed business interruption and supply chain risk, natural catastrophes and fire and explosion as their top three concerns, followed by loss of reputation or brand value; cyber crimes, IT failures or espionage; intensified competition; quality deficiencies or serial defects; environmental changes; changes in legislation and regulation; and market stagnation or decline.
The Allianz report notes companies’ increasing awareness and concern over interconnected risks, such as cyber risk and reputation risk.
“Those two can to some degree be tied together,” said Tom Varney, Chicago-based regional manager for Allianz Risk Consulting in the Americas. “You can have a cyber issue that causes your company a reputation concern.”
Natural catastrophes and supply chain exposures are another example of such interconnected risks, though in some areas of the world the effort to better understand the exposures can be challenging, Mr. Varney said.
“There’s very much interest in better understanding nat cat exposure globally,” said Mr. Varney. “There are areas of the world that we struggle with. The information is just not there. The history is just not there.”
The 2014 Allianz Risk Barometer report can be found here.