Cyber risks top business concerns for risk managers for 2022, pushing business interruption from the top spot.
Although COVID 19 continues to be a threat, ransomware attacks and other forms of attack rank top in the Allianz Risk Barometer 2022. In fact, the threat is so prevalent it pushed business interruption into second place. Business interruption failed to rank top only three times out of the survey’s 11-year history.
Hackers deploy double extortion to intensify attacks. The report said, “cyber criminals combine the initial encryption of data with a secondary form of extortion, such as the threat to release sensitive or personal data.”
Hackers also now encrypt or delete backups, making restoration and recovery more difficult or impossible. Increasingly, attackers harass employees to gain access to systems, or go directly to company senior executives to demand ransoms.
Interruption
Supply chain disruption hit almost half (45 per cent) of respondents in 2021. But now most say these pressures are likely to ease in the second half of this year. Instead, companies say digitalisation is the biggest coming challenge for avoiding business interruption.
Natural catastrophe risk rose to third place, while the pandemic dropped to fourth. In addition, climate change ranked sixth.
“Respondents are concerned about the physical loss and supply chain impact from climate change-related weather events,” said the report. “However, they are also worried about managing the transition to a low carbon economy.”
Climate
That means dealing with increasing regulation, reporting requirements and litigation. In fact, “lack of actions taken to address climate change” is the second highest ESG concern behind cyber.
But businesses need to be careful of physical losses. Annual insured losses from natural catastrophes in 2021 are around $105bn, making it the fourth highest since 1970, according to Swiss Re.
The report said business are rethinking protection measures for sites and production plants to make them more robust against increasing extreme weather events. They are also dealing with implementing climate and energy regulations and, increasingly, preparing to meet comprehensive reporting requirements.
