For the first time ever,Â Cyber incidentsÂ (39% of responses) ranks as the most important business risk globally in the ninthÂ Allianz Risk Barometer 2020, relegating perennial top perilÂ Business interruption (BI) (37% of responses) to second place.
What are the top risks for 2020?
- The risk ofÂ Cyber incidentsÂ have become more damaging and expensive for companies â€“ and often result in lawsuits and litigation after the event
- Business interruptionÂ ranks second, but remains a key challenge with digitalization and civil unrest creating new causes of disruption and loss of income
- Climate changeÂ rises to its highest-ever position â€“ companies are most concerned about physical losses from extreme weather events but also fear consumer criticism and increasing regulatory and legal action.
Seven years ago cyber risk ranked only 15th with just 6% of responses. Awareness of the cyber threat has grown rapidly in recent years, driven by companiesâ€™ increasing reliance on their data and IT systems and a number of high-profile incidents.
Businesses face a growing number of cyber challenges including larger and more expensive data breaches, an increase in ransomware and business email compromise (spoofing) incidents, as well as the prospect of litigation after an event. Political differences between nation states being played out in cyber space brings added risk complexity, while even a successful merger or acquisition (M&A) can result in systems problems.