According to a report ‘Allianz Risk Barometer 2O16’ released in Lagos yesterday by Allianz Global Corporate & Specialty Africa, the continent is facing a deluge of business risks in the current year, which affect businesses and economic growth in individual countries.
Below is the summary of the report
Business interruption (incl. supply chain disruption), market developments (volatility, intensified competition and market stagnation) and cyber incidents are the top three global business risks. Business interruption (BI) is top for the fourth year in succession.
The risk landscape is changing. Businesses face a wider range of disruptive forces in 2016 and beyond. The effects of globalization, digitalization and technological disruption pose fundamental challenges to many business models.
Businesses and insurers must review their insurance and risk mitigation needs to reflect this new risk management reality. Refining existing, and developing new, risk services will be necessary.
Interconnectivity of risk continues to grow. Many of the top 10 risks such as natural catastrophes, fire, explosion, cyber incidents and political risks can have severe BI implications. Businesses are increasingly concerned about the impact political instability can have on supply chains.
Market developments is the second top risk. Many industrial sectors are facing tougher operating conditions, including intensified competition from new areas.
Businesses are more concerned about cyber incidents, which is the top long-term risk and the peril most likely to increase the threat of BI. Hackers are not the only problem. Operational technology issues also result in major system interruptions.
Digital and technological innovations and transformations, such as Industry 4.0, bring new risks in addition to benefits. Increasing sophistication of cyber-attacks is the impact of increasing digitalization that businesses fear most. Many companies have insufficient knowledge and budget to mitigate this risk, as the threat continues to evolve.
There are significant differences in the top 10 risks around the world.
Macro-economic developments top the Africa & Middle East rankings.
Cyber incidents is the number one risk in the UK.