Cyber joins business interruption as a leading global risk for companies for first time

In the wake of mega data breaches and privacy scandals, major IT outages and the introduction of tighter data protection rules in the European Union and other countries, cyber risk is now a core concern for businesses in 2019 and beyond. According to the Allianz Risk Barometer 2019, Cyber incidents (37 percent of responses) are neck-and-neck with Business interruption (BI) (37 percent of responses) as the top business risks globally . Climate change (#8 with 13 percent of responses) and Shortage of skilled workforce (#10 with 9 percent of responses) are the biggest climbers globally. 

At the same time, companies are more worried year-on-year about Changes in legislation and regulation (#4 with 27 percent of responses) resulting in impacts such as Brexit, trade wars and tariffs. The annual survey on global business risks from Allianz Global Corporate & Specialty (AGCS) incorporates the views of a record 2,415 experts from 86 countries including CEOs, risk managers, brokers and insurance experts.

1 Business interruption and cyber incidents are tied at the top of the ranking at 37 percent of all responses. However, business interruption received more responses by number: 1,078 to 1,052
“Companies need to plan for a wide range of disruptive scenarios and triggers, as this is where their big exposure lies in today’s networked society,” says Chris Fischer Hirs, CEO of AGCS. “Disruptive risks can be physical, such as fire or storms, or virtual, such as an IT outage, which can occur through malicious and accidental means. They can stem from their own operations but also from a company’s suppliers, customers or IT service providers. Whatever the trigger, the financial loss for companies following a standstill can be enormous. New risk management solutions, analytical tools and innovative partnerships can help to better understand and mitigate the modern myriad of BI risks and prevent losses before they occur.”

BI threats continue to evolve

BI remains the top threat for businesses worldwide for the seventh year running and is the top risk in countries such as the U.S., Canada, Germany, Spain, Italy and China. Potential BI scenarios are becoming ever more diverse and complex in a globally connected economy, including breakdown of core IT systems, product recalls or quality issues, terrorism or political rioting or environmental pollution. Both cyber and BI risks are increasingly interlinked as ransomware attacks or accidental IT outages often result in disruption of operations and services costing hundreds of millions of dollars.

Cyber incidents rank as the BI trigger most feared by businesses (50 percent of responses), followed by fire (40 percent) and natural catastrophes (38 percent). At the same time, BI is seen as the biggest cause of financial loss for businesses after a cyber incident (69 percent of responses). 

Cyber – growing awareness, growing losses

Increasing concern over Cyber incidents follows a watershed year of activity in 2018. “Cyber risk has been a major risk for a number of years, but as with any new risk it has struggled with awareness,” explains Marek Stanislawski, Deputy Global Head of Cyber, AGCS. “We have now reached a point where cyber is as equally concerning for companies as their major traditional exposures.”

Cyber crime now costs an estimated $600 billion a year – up from $445 billion in 2014 [1]. This compares with a 10-year average economic loss from natural catastrophes of $208 billion [2] – three times as much. While criminals use more innovative methods to steal data, commit fraud or extort money, there is also a growing cyber threat from nation states and affiliated hacker groups targeting critical infrastructure providers or stealing valuable data or trade secrets from companies. Cyber incidents are increasingly likely to spark litigation, including securities and consumer class actions. Data breaches or IT outages can generate large third party liabilities as affected customers or shareholders seek to recoup losses from companies.

[1] Center for Strategic and International Studies, Economic Impact of Cybercrime – No Slowing Down

[2] Swiss Re, Preliminary sigma estimates for  2018

Risk risers and fallers

Natural catastrophes (28 percent of responses) again ranked third in this year’s top 10 ranking of global business risks with 2018 being a more benign version of 2017’s peak catastrophe losses, although economic losses still totaled close to $150 billion. Ongoing uncertainty over Brexit, global trade wars and tariffs fuel corporate concerns about Changes in legislation and regulation (#4 with 27 percent of responses).

Climate change (#8 with 13 percent of responses) and Shortage of skilled workforce (#10 with 9 percent of responses) are the biggest climbers globally in this year’s survey. Climate change could not only be a harbinger of increasing losses and disruption from extreme weather events and natural catastrophes but is also likely to have big implications for regulation and liability considering rigid emission targets and new reporting and disclosure requirements in many sectors.

Shortage of skilled workforce appears for the first time among the 10 top business risks globally as well as for many countries in Central and Eastern Europe, the UK, the U.S., Canada and Australia. It is driven by factors such as changing demographics, Brexit uncertainty and a shallow pool of talent in the digital economy.

“Skilled workforce — and human capital more generally — has become the scarce resource of the digital economy,” says Ludovic Subran, Deputy Chief Economist of Allianz. “Competition is fierce between companies to get new recruits with competencies in artificial intelligence, data science, or ‘frontier risk management’ such as managing cyber or reputational risk as most of these jobs did not exist 10 years ago. Even attractive salaries do not suffice as the pool of recruits with the needed skillset is limited and the urgency to onboard them does not allow for on-the-job training.”

Allianz Commercial is the center of expertise and global line of Allianz Group for insuring mid-sized businesses, large enterprises and specialist risks. Among our customers are the world’s largest consumer brands, financial institutions and industry players, the global aviation and shipping industry as well as family-owned and medium enterprises which are the backbone of the economy. We also cover unique risks such as offshore wind parks, infrastructure projects or Hollywood film productions. Powered by the employees, financial strength, and network of the world’s #1 insurance brand, we work together to help our customers prepare for what’s ahead: They trust on us for providing a wide range of traditional and alternative risk transfer solutions, outstanding risk consulting and Multinational services as well as seamless claims handling. Allianz Commercial brings together the large corporate insurance business of Allianz Global Corporate & Specialty (AGCS) and the commercial insurance business of national Allianz Property & Casualty entities serving mid-sized companies. We are present in over 200 countries and territories either though our own teams or the Allianz Group network and partners. In 2022, the integrated business of Allianz Commercial generated more than €19 billion gross premium globally.

These assessments are, as always, subject to the disclaimer provided below.

The Allianz Group is one of the world's leading insurers and asset managers with around 125 million* private and corporate customers in nearly 70 countries. Allianz customers benefit from a broad range of personal and corporate insurance services, ranging from property, life and health insurance to assistance services to credit insurance and global business insurance. Allianz is one of the world’s largest investors, managing around 737 billion euros** on behalf of its insurance customers. Furthermore, our asset managers PIMCO and Allianz Global Investors manage about 1.7 trillion euros** of third-party assets. Thanks to our systematic integration of ecological and social criteria in our business processes and investment decisions, we are among the leaders in the insurance industry in the Dow Jones Sustainability Index. In 2023, over 157,000 employees achieved total business volume of 161.7 billion euros and an operating profit of 14.7 billion euros for the group.
* Including non-consolidated entities with Allianz customers.
** As of December 31, 2023.

Press contacts

Heidi Polke
Allianz SE
Lesiba Sethoga
Allianz Commercial (Johannesburg)
Michael Burns
Allianz Commercial (London)
Daniel Aschoff
Allianz Global Corporate & Specialty (Munich)
Sabrina Glavan
Allianz Commercial (New York)
Florence Claret
Allianz Commercial (Paris)
Camila Corsini
Allianz Commercial (Sao Paolo)
Wendy Koh
Allianz Commercial (Singapore)
As with all content published on this site, these statements are subject to our cautionary note regarding forward-looking statements:

Further information

Lights, camera, action: Navigating the economic landscape

Delve into Allianz Research's new Economic Outlook for 2024-25, presenting a detailed analysis of the global economy's trajectory. This report offers a glimpse into anticipated growth rates, the strategic direction of central banks, and the evolving dynamics of global trade. With emerging markets at a crossroads and inflationary pressures under scrutiny, discover the key factors poised to influence economic trends. Gain essential insights into the unfolding economic landscape.

Americans Reducing Retirement Savings and Taking on Debt Due to Inflation

Allianz Life study finds ongoing inflation is hampering Americans ability to prepare for their financial future, but many are optimistic inflation will subside.

Sustainability will be treated like finance and we need all our employees to work on it

Publishing a sustainability report is business as usual. What makes it special this year and how does it relate to the Free Share offer and sustainability training for Allianz employees globally? We spoke with Renate Wagner, Member of the Board of Management of Allianz SE responsible for Asia Pacific, Mergers & Acquisitions, People and Culture, and Günther Thallinger, Member of the Board of Management of Allianz SE, Investment Management, Sustainability.

Global insolvency outlook: Reality check

Allianz releases today its latest Global Insolvency Report and unveils updated forecasts for 2024 and 2025.

A global conundrum: How immigration is writing the next chapter for global economies

The story of immigration and its impact on the labor force isn't about one country or one policy; it's about a global shift in demographics, economies, and societies. Countries across the globe are grappling with the challenges of maintaining a vibrant and productive workforce amidst aging populations and declining birth rates. Allianz Research’s newly published report offers a glimpse into how immigration could be the linchpin in sustaining not just economies, but the very fabric of societies worldwide.

Women Taking On More Financial Responsibility

Women are taking on more financial responsibility, according to the 2023 Women Money Power Study from Allianz Life Insurance Company of North America (Allianz Life). Nearly half of all women (49%) consider themselves to be the chief financial officer of their household. At the same time, women are feeling less secure financially than they did in the past.

Allianz Country Risk Atlas 2024: A compass in times of global uncertainty

To boldly go where no one has gone before requires, well, a good compass. The newly published Country Risk Atlas 2024 from Allianz Research serves as the ultimate guide on this expedition, offering insights into the intricate constellation of economic, political, and ESG factors that shape the non-payment risks in 83 countries. The Atlas reveals hidden risks and opportunities guiding businesses and investors aiming to navigate the unpredictable waves of global markets.

Allianz launches powerful, new dashboard tracking transition pathways to Net Zero

Allianz SAMEpath plots the emission reductions and investments needed to achieve commitments made by countries under the 2015 Paris Agreement • The dashboard charts the economic developments and potential transition risks for sectors and economies in different climate scenarios • SAMEpath harmonizes existing models and scenarios into one convenient, quick reference tool

Bridging the gap: Unveiling the economic divide between the U.S. and Eurozone

Allianz Research's latest report sheds light on the expanding economic gap between the United States and the Eurozone, revealing significant disparities in growth and innovation since the Euro's introduction in 1999. This divide has not only become more pronounced, but has raised critical questions about the future of economic competitiveness and innovation in these regions.