Allianz | Allianz Risk Barometer 2023 (2023)

IsAllianz Risk Barometer 2023means continuity and change:cyber incidentsjbusiness interruptionswere ranked among the top business risks globally for the second year running (both with 34% of responses). They follow him in 3rd placemacroeconomic developmentslike inflation and a looming recession (10th place last year) and theenergy crisisas a new addition to number 4 of the top climbers in this year's list of global corporate risks, which is published annually by the industrial insurer Allianz Global Corporate & Specialty.

With regard to Germany, the same risks dominate as worldwide, sometimes in a different order: here arebusiness interruption,cyber incidents, and theenergy crisisin the first three places. HePandemic(from 4th to 13th place) appears to have been overtaken by the availability of vaccines and the lifting of Covid restrictions and is no longer among the top ten threats, either globally or in Germany.

Joachim Müller, CEO of AGCS, comments on the results: “The Allianz risk barometer shows for the second year in a row that companies today are exposed to an increased risk of cyber incidents and business interruption. At the same time, they see high inflation, a looming recession and the energy crisis as imminent threats to their business. Businesses, particularly in Europe and the US, are concerned about the ongoing "permacrisis" arising from the fallout from the pandemic and the economic and political fallout from the ongoing war in Ukraine. The current situation is a stress test for all companies.”

Müller continued: “The positive news is that as an insurer, we are seeing continuous improvements in terms of resilience and risk management for many of our customers. Many companies have made their supply chains more resilient and resilient to business disruptions and strengthened their cyber controls. Being more resilient and managing risk better has been a key task for many companies in recent years.”

In 2023, the four biggest risks are theAllianz risk barometerBroadly the same across all company sizes (large, medium and small) and in Central Europe and the US (with the exception of the energy crisis). Risk priorities for companies in Asia-Pacific and African countries differ somewhat, reflecting different exposures to the ongoing war in Ukraine and its economic and political fallout.

cyber incidents, such as IT failures, ransomware attacks or data breaches, are the most important risk worldwide for the second year in a row. According to the Allianz Cyber ​​​​​​Competence Center, the frequency of exorbitant ransomware attacks will also be significantly higher in 2023, while the average cost of a data breachare the highest ever at $4.35 millionbefore and this year it could surpass the 5 million mark. The conflict in Ukraine and other geopolitical tensions increase the risk of a large-scale cyberattack by state-sponsored actors. Add to that a growing shortage of cybersecurity professionals, which creates additional challenges in improving security.

“For many businesses, the threat of cyber attacks remains greater than ever, and cyber insurance claims remain at high levels. Large organizations are now used to being attacked, and those with a reasonable level of cybersecurity can thwart most attacks. But small and medium-sized companies are also increasingly affected. They tend to underestimate their exposure and should continually invest in strengthening their cyber defences,” he stresses.Shanil Williams, AGCS Board Member and Director of Corporate Underwriting.For companies in many countries, 2023 is likely to be another year of heightened business risks.business interruptions(BU) Because many business models are susceptible to sudden changes, which in turn affect sales and profits.

The range of interference sources is large. Cyber ​​attacks are the most feared cause of enterprise BI (45% of responses), followed by the energy crisis (35%) and natural disasters (31%). Soaring energy costs are forcing energy-intensive industries in particular to use energy more efficiently, move production to alternative locations or even consider temporary closures. The resulting shortage threatens to disrupt supplies to a number of critical industries in Europe, including food, agriculture, chemicals, pharmaceuticals, construction and manufacturing. A global recession is another disruptive scenario in 2023 as rising corporate bankruptcies threaten supplier defaults.Alliance tradeexpects corporate bankruptcies to increase by 19% in 2023.

Macroeconomic developments such as inflation or volatility in economic and financial markets were ranked as the third most important risk facing companies worldwide in 2023 (25% of responses), up from 10th in 2022. It is the first time in a decade that this risk has increased the top 3 up. According to team atAlliance Research, which predicts a recession in Europe and the United States in 2023. Inflation is of particular concern as it eats away at the pricing structure and margins of many companies. Like the real economy, financial markets are in for a difficult year as central banks withdraw excess liquidity and trading volumes decline even in historically liquid markets.

“2023 will be a challenging year; From a purely economic point of view, it will literally be a year to forget for many households and companies. But there's no need to despair," he says.Ludovic Subran, chief economist at Allianz. “On the one hand, the turnaround in interest rates, which ultimately benefits millions of savers, helps. The medium-term prospects are also much better despite or precisely because of the energy crisis. The consequences, beyond the expected recession in 2023, are already becoming apparent: an accelerated shift in the economy towards decarbonisation and increased risk awareness in all parts of society, which strengthens social and economic resilience.”

dieenergy crisisis the most worrying risk in theAllianz risk barometernew or ranked 4th (22%). Some industries such as chemicals, fertilizers, glass and aluminum may depend on a single energy source (Russian gas in the case of many European countries) and are therefore vulnerable to power outages or price fluctuations. When such core industries struggle, the impact is felt in other sectors further down the value chain. HighAlliance tradeThe energy crisis is the biggest blow to the profitability of European companies. High energy prices would wipe out most industrials' gains as pricing power wanes amid weaker demand.

natural disasters(19%) and theclimate change(17%) still give companies a lot of concern, even if they fall behind in the ranking compared to last year. In a year in which Hurricane Ian, record heat, drought and other natural catastrophes and extreme weather events caused more than $100 billion in insured losses ( Swiss Re) remain among the top seven global business risks.

IsAllianz risk barometeris an annual ranking of the greatest corporate risks that the corporate insurer Allianz Global Corporate & Specialty (AGCS) compiles together with other Allianz companies. This year, it includes the views of 2,712 risk management professionals in 94 countries and territories, including CEOs, risk managers, brokers and underwriters. The survey appears for the 12th time.

The global ranking list as well as numerous country rankings areHerecompiled

The complete study and much more information can be found here. Here.