Cyber incidents a new worry for global businesses: AGCS

Cyber incidents have become a main worry for global businesses, according to a new report by insurer Allianz Global Corporate & Specialty (AGCS).

The annual Allianz Risk Barometer 2016 featured cyber incidents in the top three for the first time. Cyber incidents were also cited as the most important long-term risk for companies in the next ten years.

Another addition to the top three concerns was market developments. Topping the barometer however was business interruption, which has remained the top risk for the fourth successive year.

The data found many companies are concerned that business interruption losses, which usually result from property damage, will increasingly be driven by cyber-attacks, technical failure or geo-political instability as new “non-physical damage” causes of disruption.

Natural catastrophes dropped two positions in the barometer to fourth year-on-year, reflecting the fact that in 2015 losses from natural disasters reached their lowest level since 2009.

More than a third of responses (34 percent) cited market developments such as intensified competition or market volatility/stagnation as one of the three most important business risks in 2016, ranking this new survey category as the second top peril overall.

Many businesses are facing a growing number of challenges which threaten their profitability and possibly also their business models also according to the report.

“The corporate risk landscape is changing as many industrial sectors are undergoing a fundamental transformation,” said Chris Fischer Hirs, chief executive officer, AGCS.

“New technologies, increasing digitalisation and the ‘Internet of Things’ are changing customer behaviour, industrial operations and business models, bringing a wealth of opportunities, but also raising awareness of the need for an enterprise-wide response to new challenges. As insurers we need to work together with our corporate clients to help them to address these new realities in a comprehensive manner.”

The barometer surveys more than 800 risk managers and insurance experts from over 40 countries.