Business interruption and cyber incidents interlink as the major threat for companies through 2018 and beyond, according to the insight of 1,911 risk experts from 80 countries in the Allianz Risk Barometer 2018.
Business interruption (BI) ranks as the most important global risk for the sixth year in a row (42% of responses), due to its tremendous effect on revenues. Companies face an increasing number of scenarios – from traditional exposures, such as the physical damage impact of natural catastrophes and fires on facilities and the supply chain to new triggers stemming from digitalization and interconnectedness that typically come without physical damage, but high financial loss. Cyber incidents is the most feared BI trigger for the first time. BI is also the main cause of economic loss for businesses after a cyber incident. Cyber BI incidents are increasing, resulting from hacker attacks, such as ransomware incidents, but more frequently from technical failures and employee error.
Cyber incidents continues an upward trajectory to 2nd most important business risk (40%). Five years ago it ranked 15th. Like a natural disaster, an attack can potentially impact hundreds of companies and incidents have escalated. So-called “cyber hurricane” events, where hackers disrupt large numbers of companies through common internet infrastructure dependencies, are increasing. Meanwhile, the introduction of the General Data Protection Regulation (GDPR) across Europe in May 2018, brings the prospect of more, and larger, fines for businesses who don’t comply. The way in which a business manages a data breach has a direct impact on the final cost. This will become even more the case under the GDPR. Reputational damage is irrevocably linked if the response to a cyber incident is inadequate. Awareness of the cyber threat is soaring among small- to medium-sized businesses (SMEs).
Source : Allianz Real Estate