Cyber incidents join business interruption as the risks most worrying businesses
- Published: Thursday, 17 January 2019 09:56
The recently published Allianz Risk Barometer 2019 says that traditional risks such as natural catastrophes continue to challenge, while other threats, including business interruption and reputational risk, continue to evolve.
A consequence of many of the other risks in the Allianz Risk Barometer, business interruption (BI) is the top threat for companies for the seventh year running (37 percent of responses to the associated survey). Businesses face an increasing number of BI scenarios. Many can occur without physical damage but with high losses. Events such as breakdown of core IT systems, product recall or quality incidents, terrorism, political violence or rioting and environmental pollution can bring businesses to a standstill, having a devastating effect on revenues.
BI is joined at the top of the Risk Barometer ranking for the first time by cyber incidents (37 percent). Increasingly, cyber incidents bring their own BI losses. Respondents rank cyber as the BI trigger they fear most, given many companies’ primary assets can often be data, service platforms or groups of customers or suppliers.
Increasing concern over cyber incidents follows a watershed year of activity. There is also a growing threat from nation states, which use technology to steal valuable data and trade secrets, with implications for businesses.
The impacts of mega data breaches, privacy scandals and the introduction of the European Union’s General Data Protection Regulation – which has also inspired tougher privacy rules and the threat of large fines elsewhere – are also occupying companies’ thoughts. Cyber incidents are increasingly likely to spark litigation, including securities and consumer class actions.