Insurer’s list of business concerns has other items transport industry shares
The broad transport and logistics industry is a headline sector amongst those industries exposed to increasing number of disruptive scenarios, according to insurer Allianz.
In its fourth such survey, the Allianz Risk Barometer 2015 shows “business interruption and supply chain” risks remains of most concern for 47 per cent of respondents for the third year in succession.
“Loss of reputation and brand” continues its rise up the list, moving into second place (35 per cent) in 2015, up from thirdin 2014.
Other risks that have moved up in the latest list are “intensified competition” (35 per cent), which has rocketed to third from eight last year in the latest survey, and “talent shortage/aging workforce” (24 per cent), which has risen to fourth position from ninth last year.
For the first time, “market stagnation or decline” (18 per cent) has appeared in the top 10 on the Australian list in sixth position, while it has fallen internationally to seventh from fifth.
Allianz Global Corporate & Specialty (AGCS) Pacific general manager Holger Schaeffer states that the growing interdependency of many industries and processes means businesses are now exposed to an increasing number of disruptive scenarios.
“Negative effects can quickly multiply; one risk can lead to several others; natural catastrophes or cyber attacks can cause business interruption, not only for one company but for whole sectors or critical infrastructure,” Schaeffer says.
“Risk management must reflect this new reality. Identifying the impact of any interconnectivity early can mitigate or help prevent losses occurring. It is also essential to foster cross-functional collaboration within companies to tackle modern risks.”
Interestingly, while “cyber risk” has risen to fifth from seventh position on the international Risk Barometer, it has fallen out of the Australian top 10 from fourth position in 2014.
Despite this local anomaly, there is no question that the risk of cyber crime, IT failures and data breaches is on the rise. Cyber risk moved up the Risk Barometers of Europe, the Americas, the Middle East and Africa and rose into the top 5 on the overall international Risk Barometer for the first time.
Although awareness of cyber risks is generally high and increasing, many companies are still underestimating the potential impacts, according to 73 per cent of responses from Allianz risk experts located around the world. Budgetary constraints are another reason why companies are not better prepared to combat cyber risks.
“Cyber risks are very complex,” Schaeffer says.
“Different stakeholders such as IT security architects and business continuity managers need to share their knowledge to identify and evaluate threat scenarios.
“Knowledge that previously might have been siloed in businesses, needs to be incorporated into one’ think tank’, which can look at risks holistically.
“The ‘human factor’ should also not be underestimated, as employees can cause IT security incidents, inadvertently and deliberately.”