Cyber risk, disasters top fears for businesses in 2019

17th January, 2019 11:07:55 printer

NEW YORK: Cyber risks and unforeseen interruptions to business are the top commercial risks globally in 2019 and beyond, according to a survey.

Cyber breaches are most feared while business interruption - loss due to disaster-related closure of a facility or due to the rebuilding process after a catastrophe - scenarios are becoming more complex with rising costs globally, according to Allianz Risk Barometer 2019 - an annual corporate risk survey, report agencies.

“Companies need to plan for a range of disruptive scenarios and triggers, as this is where their big exposure lies in today’s networked society,” said Chris Hirs, chief executive of Allianz Global Corporate & Specialty.

Thirty seven per cent of respondents considered cyber breaches and business interruption as the top risks the corporate world is currently facing.

Disruptive risks can be physical, such as fire or storms, or virtual, such as an IT outage, which can occur through malicious and accidental means, said Mr Hirs.

“Whatever the trigger, the financial loss for companies following a standstill can be enormous.”

Companies are also more worried year-on-year about matters such as US-China trade tensions, rising tariffs and the Brexit issue, with 27 per cent of respondents seeing legislation and regulation as a major corporate challenge in 2019.

The survey polled 2,415 business experts from 86 countries, including chief executives, risk managers, brokers and insurance professionals.

Business interruption has been the top threat for companies worldwide for seven years but this year it is joined by cyber concerns as the leading global risk.

“Potential business interruption scenarios are becoming ever more diverse and complex in a globally connected economy, including breakdown of core IT [information technology] systems, product recalls or quality issues, terrorism or political rioting or environmental pollution,” said the report.