Allianz Risk Barometer 2021: Covid-19 trio tops Africa and global business risks
Allianz Risk Barometer 2021: Covid-19 trio tops Africa and global business risks
Allianz survey: Business interruption, Pandemic outbreak and Cyber incidents
are the top three business risks for 2021 – all strongly interlinked.
outbreak, Business interruption and Cyber incidents are the top three business
risks in Africa.
outbreak rockets to #2 from #17 and is seen as main cause of business
interruption in 2021, followed by cyber. Companies look to de-risk supply
chains and boost business continuity management for extreme events.
Market developments (#4), macroeconomic developments (#8) and political violence
(#10) all rising risks. Socioeconomic consequences of the pandemic will bring more insolvencies and likely fuel further
civil unrest in 2021. Climate change falls
to #9 but will be back on the board agenda as a priority in 2021.
York/Paris/Sao Paulo/Singapore – January 19, 2021 – January 19, 2021: A
trio of Covid-19 related risks heads up the 10thAllianz Risk Barometer 2021, reflecting potential disruption and loss
scenarios companies are facing in the wake of the coronavirus pandemic. Business
interruption (#1 with 41% responses) and Pandemic outbreak (#2 with 40%) are this year’s top business risks with Cyber
incidents (#3 with 40%) ranking
a close third.The annual survey on global
business risks from Allianz Global Corporate & Specialty (AGCS)
incorporates the views of 2,769 experts in 92 countries and territories,
including CEOs, risk managers, brokers and insurance experts.
“The Allianz Risk Barometer 2021 is
clearly dominated by the Covid-19 trio of risks. Business interruption,
pandemic and cyber are strongly interlinked, demonstrating the growing vulnerabilities
of our highly globalized and connected world,” says Joachim Müller, CEO of
AGCS. “The coronavirus pandemic is a reminder that risk management and business
continuity management need to further evolve in order to help businesses
prepare for, and survive, extreme events. While the pandemic continues to have
a firm grip on countries around the world, we also have to ready ourselves for
more frequent extreme scenarios, such as a global-scale cloud outage or
cyber-attack, natural disasters driven by climate change or even another
The Covid-19 crisis continues to represent
an immediate threat to both individual safety and businesses, reflecting why pandemic
outbreak has rocketed 15 positions up to #2 in the rankings at the expense of
other risks. Prior to 2021, it had never finished higher than #16 in 10 years
of the Allianz Risk Barometer, a clearly underestimated risk. However, in 2021,
it’s the number one risk in 16 countries and among the three biggest risks across
all continents and in 35 out of the 38 countries which qualify for a top 10
risks analysis. Japan, South Korea and Ghana are the only exceptions.
Market developments (#4 with
19%)also climbs up the Allianz Risk Barometer 2021, reflecting the risk
of rising insolvency rates following the pandemic. According to Euler Hermes, the bulk of
insolvencies will come in 2021. The trade credit insurer’s global insolvency index
is expected to hit a record high for bankruptcies, up 35% by the end of 2021,
with top increases expected in the US, Brazil, China and core European
countries. Further, Covid-19
will likely spark a period of innovation and market disruption, accelerating
the adoption of technology, hastening the demise of incumbents and traditional
sectors and giving rise to new competitors. Other risers include Macroeconomic
developments (#8 with 13%) and Political
risks and violence (#10 with 11%) which are, in large part, a
consequence of the coronavirus outbreak, too.
Fallers in this year’s survey include Changes in legislation and regulation
(#5 with 19%), Natural catastrophes (#6 with 17%), Fire/explosion
(#7 with 16%), and Climate change (#9 with 13%), all clearly superseded
by pandemic concerns.
The top risks which concern businesses
the most in Africa are Pandemic Outbreak (#1 with 36% or responses), Business
interruption (moves from #1 to #2 with 36%) and Cyber incidents is now at #3
from #2 last year. The three risks also feature prominently in South Africa,
Nigeria, Ghana, Kenya, Senegal, Ivory Coast, Morocco and Cameroon.
Pandemic drives disruption – now and in future
Prior to the Covid-19 outbreak, Business interruption (BI) had
already finished at the top of the Allianz Risk Barometer seven times and it
returns to the top spot after being replaced by cyber incidents in 2020. The
pandemic shows that extreme global-scale BI events are not just theoretical,
but a real possibility, causing loss of revenues and disruption to production,
operations and supply chains. 59% of respondents highlight the pandemic as the main
cause of BI in 2021, followed by Cyber
incidents (46%) and Natural
catastrophes and Fire and explosion
(around 30% each).
is adding to the growing list of non-physical damage BI scenarios such as cyber
or power blackouts. “The consequences of the pandemic – wider digitalization, more
remote working and the growing reliance on technology of businesses and
societies – will likely heighten BI risks in coming years,” explains Philip Beblo,
expert in AGCS’s global Property underwriting team. “However, traditional
physical risks will not disappear and must remain on the risk management agenda.
Natural catastrophes, extreme weather or fire remain the main causes of BI for
many industries and we continue to see a trend for larger losses over time.”
In response to
heightened BI vulnerabilities, many companies are aiming to build more
resilient operations and to de-risk their supply chains. According to Allianz
Risk Barometer respondents, improving business continuity management is the
main action companies are taking (62%), followed by developing alternative or
multiple suppliers (45%), investing in digital supply chains (32%) and improved
supplier selection and auditing (31%). According to AGCS experts, many companies
found their plans where quickly overwhelmed by the pace of the pandemic. Business
continuity planning needs to become more holistic, cross-functional, and
dynamic, monitor and measure emerging or extreme loss scenarios, be constantly
updated and tested and embedded into an organization’s strategy.
Cyber perils intensify
Cyber incidents may have slipped to
#3 but it remains a key peril with more respondents than in 2020 and still ranking
as a top three risk in many countries, including Brazil, France, Germany,
India, Italy, Japan, South Africa, Spain, UK and the US. The
acceleration towards greater digitalization and remote working driven by the
pandemic is also further intensifying IT vulnerabilities. At the peak of the first wave of lockdowns in
April 2020, the FBI reported a 300% increase in incidents alone, while cyber
crime is now estimated to cost the global economy over $1trn, up 50% from two years ago. Already high in frequency, ransomware
incidents are becoming more damaging, increasingly targeting large companies
with sophisticated attacks and hefty extortion demands, as highlighted in the
recent AGCS cyber risk trends report.
“Covid-19 has shown how quickly
cybercriminals are able to adapt and the digitalization surge driven by the
pandemic has created opportunities for intrusions with new cyber loss scenarios
constantly emerging,” says Catharina Richter, Global Head of the Allianz Cyber
Center of Competence at AGCS. “Attackers are innovating using automated
scanning to identify security gaps, attacking poorly secured routers or even
using ‘deepfakes’ – realistic media content modified or falsified by artificial
intelligence. At the same time, data protection and privacy regulation and
fines for data breaches continue their upward trend.”
Risers and fallers Macroeconomic developments maintains
its forth rank in Africa. Globally, it is up to #8 and Political risks and
violence (#10) returns to the top 10 for the first time
since 2018 and moves up from #9 to #6 in Africa, reflecting the fact that civil
unrest, protests and riots now challenge terrorism as the main exposure for
companies. The number, scale and duration of many recent events, including End
SARS, Black Lives Matter protests, anti-lockdown demonstrations and unrest
around the US presidential election, have been exceptional. As the
socioeconomic fallout from Covid-19 mounts, further political and social unrest is likely, with many
countries expected to experience an increase in activity in 2021 and beyond,
particularly in Europe and the Americas.
legislation and regulation drops from #3 to #5 and from #3 to #8 in Africa year-on-year.
“The pandemic may have caused some delays of the regulatory train, but it did
not stop or even derail it. Quite the opposite, 2021 promises to become a very
busy year in terms of new legislation and regulation, particularly in the areas
of data and sustainability,” predicts Ludovic Subran, Chief Economist at
Allianz. Natural catastrophes falls to #6 from #4, reflecting the fact
that although aggregated losses from multiple smaller events such as wildfires
or tornadoes still led to widespread devastation and considerable insured
losses in 2020, it was also the third consecutive year without a single large
event, such as Hurricane Harvey in 2017.
Climate change also falls to #9. However, the need to combat climate change remains as
high as ever, given 2020 was the joint hottest year ever recorded. “With the
vaccination campaign coming into effect, climate change will be back on the board
agenda as a priority in 2021,” says Michael Bruch, Global Head of ESG at AGCS.
“Many companies need to adjust their business for a low-carbon world – and risk
managers need to be at the forefront of this transition.”
More information on the findings of the Allianz Risk
Barometer 2021 is available here:
Watch a short film
about the top 10 risks for 2021
Regional Communication Team firstname.lastname@example.orgAbout Allianz Global Corporate &
Global Corporate & Specialty (AGCS) SE is a leading global corporate
insurance carrier and a key business unit of Allianz Group. We provide risk consultancy, Property-Casualty insurance solutions and alternative risk
for a wide spectrum of commercial, corporate and specialty risks across 10
dedicated lines of business.
Our customers are as diverse as business can be, ranging from Fortune Global 500
companies to small businesses, and private individuals. Among them are not only
the world’s largest consumer brands, tech companies and the global aviation and
shipping industry, but also wineries, satellite operators or Hollywood film
productions. They all look to AGCS for smart answers to their largest and most
complex risks in a dynamic, multinational business environment and trust us to
deliver an outstanding claims experience.
AGCS operates with its own teams in 31 countries and through the
Allianz Group network and partners in over 200 countries and territories,
employing over 4,450 people. As one of the largest Property-Casualty units of
Allianz Group, we are backed by strong and stable financial ratings. In 2019, AGCS
generated a total of €9.1 billion gross premium globally.