Business interruption and supply chain, natural catastrophes and fire/explosion top the list of company risks in 2014, according to the third annual Allianz Risk Barometer.
The study surveyed more than 400 corporate insurance experts from 33 countries, and it highlights the increasing complexity of business risks, including a combination of technological-, economic- and regulatory-related risks, potentially creating a systemic threat for businesses, a Business Wire press release states. Allianz suggests that enterprises can respond to these growing challenges through stronger internal controls, combined with a holistic approach to risk management.
The number-one concern for businesses around the globe is business interruption and supply chain losses, including in the U.S., where 61 percent of participants identified them as the top business risk in 2014. These risks account for around 50-70 percent of all insured property losses – as much as $26 billion per year.
Mid-sized companies are more concerned about fire and explosion, however, and the impact of austerity measures and credit availability.
Even more costly than BI damages, insured losses from natural catastrophes (the second top risk) totaled about $38 billion in 2013. In 2012, due to a more damaging Atlantic hurricane season, natural catastrophe losses reached $75 billion.
Loss of reputation or brand value ranks as one of the top 10 risks for the first time in 2014 as the fourth most frequently cited business risk for U.S. companies. The fifth top risk was cyber crime, which includes IT failures and espionage.