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The 3 Most Important Global Corporate Risks in 2022: Part I

Global Business Risks

For the past 11 years, Allianz Global Corporate & Specialty (AGCS), a leading global corporate insurance carrier, subsidiary to Allianz Group, annually publishes a corporate risk survey commonly known as the Allianz Risk Barometer. The Allianz Risk Barometer addresses the top business risks predicted to be precedent over the next 12 months by surveying experts in the corporate insurance world, including Allianz customers, risk consultants, underwriters, brokers, and industry trade organizations.

In 2021, the Covid-19 pandemic continued, along with unprecedented cyber attacks and natural catastrophes, negatively affecting millions worldwide. The shift to remote working created an abundance of digital risk, bringing cyber risk to the forefront and disruption to businesses and their supply chains never experienced before. The digitization of the corporate world forecasts continued business interruption and will require building better resilience against the causes of business interruption, risk management, and transparency.

The top three business risk concerns around the world, according to the Allianz Risk Barometer 2022, are cyber incidents, business interruption, and natural catastrophes. This year’s survey was conducted during October and November 2021 and is based on the understanding of 2,650 risk management experts from 89 countries and territories, across 22 countries. The top 10 global corporate risks, illustrated in the diagram below, are the most concerning and should be prioritized by businesses around the world, according to 2022 survey respondents.

Allianz Global Business Risk Chart
Figures represent the percentage of answers of all participants who responded (1,153). Figures do not add up to 100% as up to three risks could be selected.

Cyber Incidents

The Allianz Risk Barometer 2022 survey ranked cyber risk as the top global business risk; cyber risk was also the utmost concern for businesses' environmental, social, and governance (ESG) risk. The survey highlighted the impact of the combination of cyber attacks, ransomware, and the problems that arose from the acceleration of remote working and digital transformation.

In this year’s survey, 57% of respondents rank ransomware as the top cyber risk, with data breaches ranking second. Other areas of cyber risk include IT vulnerabilities due to growth in remote working and disruption from the failure of digital supply chains and cloud technology service platforms.

Today, cyber risk affects every business. Scott Sayce, Global Head of Cyber at AGCS, explains that cyber criminals are at an advantage with the commercialization of cyber crime. Cyber criminals no longer discriminate and are very willing to exploit all organizations, large and small, across all industries, not just healthcare and retail companies.

“In the past, it was mainly technology companies that were assessed on cyber security resilience, but these days, businesses across various sectors are subject to such scrutiny,” explains Michael Bruch, Global Head of Liability Risk Consulting/ESG at AGCS.

Last year in December 2021, Log4J, an open-source software, was hacked, and in just four days, there were over a million cyber attacks on companies worldwide using Log4J. This was just one of the many ransomware attacks in 2021.

Experts predict that supply chain attacks will continue to increase in 2022, specifically targeting “technology or software supply chains, critical physical infrastructure or single digital points of failure.”

“I am afraid we will see more attacks against technology supply chains and critical infrastructure – they are a logical response to organizations ramping up their cyber security, protections and responses,” says Scott Sayce, Global Head of Cyber at AGCS. “It is also likely that we will see hardware being subverted and injected into IT supply chains, and this is a scenario organizations should prepare for.”

Due to a lack of understanding surrounding cybersecurity, we recommend that companies adopt a holistic approach to include cyber insurance. Cyber insurance policies provide “an ever-growing range of technical and risk management support services.” As cyber risk continues to develop, insurers like AGCS are helping businesses improve cybersecurity, build resilience, and adopt more robust risk management practices.

It is no surprise that survey respondents expect cybersecurity to be a top risk for businesses over the next 12 months, especially with the growing number of cybersecurity threats. As the corporate world continues to transform digitally, it is crucial that organizations, as a whole, continue to develop a better understanding of how to handle and mitigate cyber risk.

In Part II of this blog series, we’ll explore the #2 and #3 Top Global Risks: Business Interruption and Natural Catastrophes.  What are your top 3 risks in 2022?

Send me your thoughts, ideas, and comments.

Ed Gaudet
CEO and Founder, Censinet

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