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Cyber incidents are greatest peril to business: Allianz

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Cyber incidents were rated as the greatest peril to business in 2022, followed by business interruption and natural catastrophes, according to the 2022 Allianz Risk Barometer released Tuesday.

“Ransomware has become a big business for cybercriminals. We will see more attacks against technology supply chains and critical infrastructure,” Scott Sayce, global head of cyber at Allianz Global Corporate and Specialty SE, said in a statement with the report.

The pandemic outbreak and changes in legislation rounded out the top five perils as cyber topped the list for only the second time, regaining the top spot after slipping to second in 2021. Climate change placed sixth, its highest ranking ever, rising from ninth last year.

The annual survey from Allianz is based on responses from 2,650 sources in 89 countries and territories, including CEOs, risk managers, brokers and insurance experts, among them Allianz employees and customers.

While cyber challenges topped the list globally, in the U.S. business interruption was the chief concern, named by 50% of respondents, with cyber second with a 37% share, according to report data. Business interruption also placed first with the U.S.’s largest trading partner, China with 36% of respondents.

The two perils traded places across the globe. In France and Germany, business interruption was first followed by cyber. In India and Italy, cyber was first, followed by pandemic outbreak and business interruption, respectively.

Business Interruptions will likely remain the key underlying risk theme in 2022,” according to AGCS Allianz Global Corporate and Specialty CEO Joachim Mueller. “For most companies, the biggest fear is not being able to produce their products or deliver their services,” he said in the statement with the report. This year, he added, “promises a gradual easing of the situation although further COVID-19-related problems cannot be ruled out.”

Pandemic outbreak slipped to fourth in 2022 from second in 2021, but the report notes that “Omicron is a reminder that COVID-19 remains an unpredictable threat, with potentially long-term and far-reaching consequences” as shown by the entry of shortage of skilled workforce into the top 10 risks at number nine, “with staff absences and shortages expected to disrupt business again in 2022,” the report said.

That natural catastrophes and climate change rose to third and sixth position, respectively, is “telling,” said the report, “with both upwards trends closely related.”  

While Risk Barometer respondents are most concerned about climate-change-related weather events causing damage to corporate property followed by business interruption and supply chain impact, they are also concerned about managing the transition of their businesses to a low-carbon economy, meeting complex regulation and reporting requirements and avoiding potential litigation risks for not adequately taking action to address climate change.