Cyber incidents and business interruption rank as the most concerning issues for corporations in an annual survey of 2,700 risk management experts from 94 countries and territories, according to the Allianz Risk Barometer 2023 report. Macroeconomic developments, such as inflation, financial market volatility and looming recession, along with the energy crisis are also growing concerns on this year’s list of global business risks.
As the above-mentioned concerns grow, worries about natural catastrophes and climate change were ranked lower than in the previous year and the pandemic was no longer a concern. However, political risks and violence, a shortage of skilled workers, changes in legislation and regulations and fire/explosion were cited as potential risks.
According to the report, the most prevalent global business risks for 2023 are:
- Cyber incidents: 34%
- Business interruptions: 34%
- Macroeconomic developments: 25%
- Energy crisis: 22%
- Changes in legislation and regulations: 19%
- Natural catastrophes: 19%
- Climate change: 17%
- Fire/explosion: 14%
- Political risks and violence: 13%
In 2023, the top-ranking risks are consistent across small, medium and large companies, as well as across core European economies and the U.S. Risk concerns for businesses in Asia-Pacific and African countries show some deviation, reflecting the different impact of the ongoing war in Ukraine and its economic and political repercussions.
Cyber incidents, such as IT outages, ransomware attacks and data breaches, rank as the most important risk globally and as the top peril in 19 different countries, including Canada, France, Japan, India and the U.K. Small companies appear to be the most worried about cybersecurity, according to the report.
For businesses in many countries, 2023 is likely to be a year of heightened risks for business interruption because many business models are vulnerable to sudden shocks and change. And, the source of disruptions is wide, according to the report. Of the respondents who cited business interruptions as a risk, cybercrime is the cause of business interruption most fear (45%), followed by the energy crisis (35%) and natural catastrophes at 31%.
Macroeconomic developments such as inflation or economic and financial market volatility rank as the third highest risk for companies globally. It ranked as number 10 on the list last year. Inflation is a particular concern here as it is “eating” into the price structure and profitability margins for many companies, according to the report.
Click here for more information on the report.