Allianz Risk Barometer 2024 Highlights Cyber Incidents as Top Global Concern

According to the latest Allianz Risk Barometer, cyber incidents have secured the top spot as the most significant worry for companies worldwide in 2024. Ransomware attacks, data breaches, and IT disruptions are key concerns, reflecting the escalating threat landscape in the digital sphere. Business interruption closely follows as the second major risk, emphasizing the intertwined nature of modern global business operations.

Noteworthy risers in this year's risk compilation include natural catastrophes, surging from sixth to third place year-on-year. Climate change, fires, explosions, and political risks also witness notable increases, signaling the growing impact of environmental and geopolitical factors on business stability.

Allianz Commercial CEO Petros Papanikolaou underscores the urgency of addressing these risks, stating, "Extreme weather, ransomware attacks, and regional conflicts [are] expected to test the resilience of supply chains and business models further in 2024." He emphasizes the need for insurance stakeholders, including brokers and customers, to stay informed and adapt insurance coverage accordingly.

The report highlights a growing resilience gap between large corporations and smaller businesses, with larger entities exhibiting increased risk awareness and a drive to enhance resilience. In contrast, smaller businesses often face challenges in identifying and preparing for diverse risk scenarios, resulting in prolonged recovery periods post-incidents.

Global Trends Driving Risk in 2024

1. Cyber Incidents (36%): Retaining its position as the top global risk for the third consecutive year, cyber incidents emerge as the foremost concern. Data breaches (59%) and attacks on critical infrastructure (53%) are identified as the most alarming cyber threats.

2. Business Interruption (31%): Despite some relief in post-pandemic supply chain disruptions, business interruption maintains its significance as the second-largest risk in 2024. Companies focus on improving business continuity management and identifying supply chain bottlenecks.

3. Natural Catastrophes (26%): Climbing three positions to claim the third spot, natural catastrophes witness increased concern after a record-breaking year in 2023. Extreme weather events and their impact on global supply chains contribute to heightened apprehension.

Regional and Sectoral Variances:

• Climate Change (18%): While maintaining its position at seventh globally, climate change emerges as a top-three risk in countries like Brazil, Greece, Italy, Turkey, and Mexico. Physical damage to corporate assets from extreme weather events poses a significant threat.
• Political Risks and Violence (14%): Escalating geopolitical tensions prompt a rise in political risks and violence to the eighth position. Societal polarization, exacerbated by economic uncertainty and disinformation, is anticipated to lead to increased social unrest in many countries.
• Macroeconomic Developments (19%): Falling to the fifth position from third, macroeconomic developments are expected to see a level of stabilization in 2024. Economic growth remains modest, with global growth projected at just over 2%.
• Shortage of Skilled Workforce (12%): Considered a lower risk globally than in 2023, the shortage of a skilled workforce drops to the tenth position. However, it remains a top-five business risk in Central and Eastern Europe, the UK, and Australia, particularly in the context of the fight against cybercrime.

The Allianz Risk Barometer underlines the dynamic and interconnected nature of global business risks, urging businesses to stay vigilant, adapt strategies, and fortify resilience measures in the face of evolving threats.

The GRC Report is the first word in governance, risk, and compliance news. As your trusted source for comprehensive coverage, the GRC Report keeps you informed and equipped to navigate the evolving landscape of governance, risk, and compliance. And remember, the GRC Report isn't just a news source; it's a community of professionals who share your passion for GRC excellence. Don't miss out on our insightful articles and breaking news – join the conversation and empower your GRC journey.