Cyber threat is the top ranking business risk followed by business interruption, according to the annual Allianz risk barometer. Physical risks also feature prominently, including natural catastrophes, fire and explosion, and climate change.
“Many of these risks are already hitting home, with extreme weather, ransomware attacks and regional conflicts testing the resilience of supply chains and business models,” the report said. “The fast pace of change, and the growing interconnected nature of risk, likely necessitates a shift up in gear for many companies when it comes to risk management.”
Weaknesses
Risk management experts completing the survey said they feared business interruption caused by cyber-attacks the most. With the inventive use of artificial intelligence, hackers are both creating new forms of attack and discovering smarter ways to exploit old weaknesses.
The survey said that respondents saw data breaches and hacks into critical infrastructure and physical assets as being of most concern. “In the context of turbulent geopolitics and this ever-deepening reliance on digital devices, the potential shutdown of critical infrastructure is likely to become a much more significant and concerning risk for businesses in the future,” the report said.
Interruption
Given the interconnected nature of today’s business world, business interruption was seen to be closely linked to many of the survey’s top risks – as well as featuring as a category in its own right.
“The most common actions businesses are taking to de-risk their supply chains are: developing alternative suppliers; improving business continuity management; and identifying and remediating supply chain bottlenecks,” the survey found.
In a separate survey by the consultant Protiviti, business executives ranked weak economic conditions and a shortage of talent as their top two risks for 2024.
Longer term
In the same survey, executives said they expected cyber threat to move into first place in the risk rankings – followed by talent management, digital adoption and disruptive innovation – over the coming decade.
“Navigating the rapid pace of these digital innovations and finding ways to leverage insights from the volumes of data organisations must evaluate are particularly concerning to executives as they think about their organisations a decade from now’” the report said.
