Allianz's Top 10 Business Risks

Allianz has released its sixth annual Allianz Risk Barometer, which surveys over 1,200 risk experts in more than 50 countries to identify the top 10 business risks for 2017.

According to the Allianz survey, these risk professionals believe the top 10 global business risks for 2017 are as follows.

1. Business interruption, including supply chain disruption and vulnerability
2. Market developments such as volatility, intensified competition/new entrants, mergers and acquisitions, market stagnation, and market fluctuation
3. Cyber-incidents, such as cyber-crime, information technology failure, and data breaches
4. Natural catastrophes from storms, floods, earthquakes, and the like
5. Changes in legislation and regulation (e.g., government change, economic sanctions, protectionism, etc.)
6. Macroeconomic developments such as austerity programs, commodity price increases, deflation, or inflation
7. Fire and explosion
8. Political risks, terrorism, and violence
9. Loss of reputation or brand value
10. New technologies (e.g., impact of increasing interconnectivity, nanotechnology, artificial intelligence, 3-D printing, drones, etc.)

Business interruption (BI) remains at the top of the list because there is a constant influx of new triggers behind the risk, according to Volker Muench, global practice group leader for property underwriting with Allianz Global Corporate & Specialty. BI has been the top peril for 5 years in a row

Market developments also remain a top concern for businesses, virtually unchanged from last year's report.

New technologies, however, appear in the top 10 list for the first time for 2017. According to the 2017 report, this change is due in part to new liability scenarios and changes in loss activity patterns anticipated from deployment of these new technologies. In addition, more than half of all responses cited increasing digitalization and use of new technologies as the most prominent trend currently transforming their business sectors.

Turning to the US domestic market, survey responses remain highly correlated with the top global concerns. In fact, 9 out of the 10 risk categories appeared on both the US and global lists, with business interruption taking the number 1 spot on both.

The US-based risk professionals who responded to Allianz's survey identified the top 10 US business risks for 2017 as follows.

1. Business interruption
2. Cyber-incidents
3. Natural catastrophes
4. Market developments
5. Changes in legislation and regulation
6. Fire, explosion
7. Loss of reputation or brand value
8. Macroeconomic developments
9. New technologies
10. Theft, fraud, corruption

The report states, "Across the Americas region, fear of business interruption, cyber-incidents, and natural catastrophes are the three major concerns for businesses." According to Thomas Varney, regional manager, Americas, Allianz Risk Consulting, "Each of these issues at times may be an unknown or hidden risk exposure, but an exposure that could create potentially both short- and long-term consequences to a company's bottom line."

"Companies worldwide are bracing for a year of uncertainty," says Chris Fischer Hirs, CEO, Allianz Global Corporate & Specialty (AGCS). "Unpredictable changes in the legal, geopolitical, and market environment around the world are constant items on the agenda of risk managers and the C-suite. A range of new risks are emerging beyond the perennial perils of fire and natural catastrophes which require rethinking of current monitoring and risk management tools."