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Cyber the top concern for businesses in 2022: Allianz

18th January 2022 - Author: Luke Gallin

Cyber perils are viewed as the top concern for businesses globally in 2022, as natural catastrophe and climate change risks climb the rankings of the latest Allianz Risk Barometer.

With 44% of respondents citing cyber incidents as their biggest concern, largely driven by the threat of ransomware attacks, the peril claimed the top spot for just the second time, after coming in third last year at 40%.

Ransomware threats in particular are confirmed as the top cyber risk for 2022 by survey respondents, driven by a flurry of recent attacks which feature new tactics such as ‘double extortion’ .

According to Scott Sayce, Global Head of Cyber at Allianz Global Corporate & Specialty (AGCS), “Ransomware has become a big business for cyber criminals, who are refining their tactics, lowering the barriers to entry for as little as a $40 subscription and little technological knowledge.

“The commercialization of cyber crime makes it easier to exploit vulnerabilities on a massive scale. We will see more attacks against technology supply chains and critical infrastructure.”

Cyber took the top spot from business interruption (BI) risks, which fell one place this year with 42% of the votes.

Interestingly, the report reveals that the rise in ransomware attacks makes cyber the most feared cause of BI, with nat cats and the pandemic seen as two other important triggers for BI.

“The pandemic has exposed the extent of interconnectivity in modern supply chains and how multiple unrelated events can come together to create widespread disruption. For the first time the resilience of supply chains has been tested to breaking point on a global scale,” said Philip Beblo, Property Industry Lead, Technology, Media and Telecoms, at AGCS.

The threats from natural catastrophe events was one of the most significant movers, climbing three places to number three on the list at 25%.

At the same time, climate change moved from ninth place to sixth for the year ahead, reflecting the rise in losses from catastrophes in general, but also from secondary perils such as floods and wildfires, which are increasingly linked to climate change.

Furthermore, insurance and reinsurance industry losses from natural disasters surpassed $100 billion again in 2021, with reinsurer Munich Re putting the figure at a huge $120 billion.

So, nat cat risk awareness is currently very high and as climate change exacerbates the trend, it’s likely that these will remain top concerns for businesses.

“The pressure on businesses to act on climate change has increased noticeably over the past year, with a growing focus on net-zero contributions,” said Line Hestvik, Chief Sustainability Officer at Allianz SE.

“There is a clear trend for companies towards reducing greenhouse gas emissions in operations or exploring business opportunities for climate-friendly technologies and sustainable products. In the coming years, many corporate decision-makers will be looking even more closely at the impact of climate risks in their value chain and taking appropriate precautions. Many companies are building up dedicated competencies around climate risk mitigation, bringing together both risk management and sustainability experts,” he continued.

While still a major concern for firms, pandemic outbreak fell from second to fourth place on the Allianz Risk Barometer, although the insurer does note that its survey was done prior to the emergence of the Omicron variant.

The report shows that businesses feel they have adapted well to the challenges of the pandemic, with 80% of respondents feeling they are “adequately or well-prepared for a future incident.”

Commenting on the report, AGCS Chief Executive Officer (CEO), Joachim Mueller, said: “’Business interrupted’ will likely remain the key underlying risk theme in 2022.

“For most companies the biggest fear is not being able to produce their products or deliver their services. 2021 saw unprecedented levels of disruption, caused by various triggers. Crippling cyber-attacks, the supply chain impact from many climate change-related weather events, as well as pandemic-related manufacturing problems and transport bottlenecks wreaked havoc.

“This year only promises a gradual easing of the situation, although further Covid-19-related problems cannot be ruled out. Building resilience against the many causes of business interruption is increasingly becoming a competitive advantage for companies.”

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