• Natural disasters and climate change fall behind in the ranking
• Companies are more worried about inflation, possible recession and energy crisis
• Pandemic no longer in top ten business risks
In January, Allianz Global Corporate & Specialty (AGCS) published its Risk Barometer for 2023. In the annual survey, which was published for the 12th time, participants are asked about the most important business risks worldwide. The 2023 survey surveyed 2,712 risk management professionals from 94 countries and territories, including CEOs, risk managers, brokers and insurance professionals.
Experts see dangers for companies here
In the 2023 Allianz Risk Barometer, political risk and violence (13 percent of responses) made it tenth in the top 10 global business risks in 2023. Fire and explosion (14 percent) fell two places from last year to ninth, while the shortage of skilled workers (14 percent) rose to eighth place. Climate change (17 percent) also continues to be a concern for businesses, with this business risk ranking seventh this year, up from sixth last year. Natural catastrophes (19 percent) have fallen from third place in the previous Risk Barometer to sixth place. According to the experts, another major risk is legal changes (19 percent) in fifth place. Against the background of the developments of the past year, with Russia’s war of aggression against Ukraine and its consequences, it is hardly surprising that the energy crisis (22 percent) has reappeared as one of the biggest business risks in fourth place in the Allianz Risk Barometer 2023.
macroeconomic changes
Respondents ranked macroeconomic changes as the third most important risk worldwide in the new year (25 percent of the answers). Last year they were ranked tenth. According to Allianz, this risk has rejoined the top 3 for the first time in ten years. As Allianz reports, according to the Allianz Research team, all three major economic areas (USA, China and Europe) are in an economic crisis at the same time. Inflation is of particular concern, “because it’s eating away at the pricing structure and margins of many companies.” Ludovic Subran, chief economist at Allianz, says 2023 will be a challenging year. “From a purely economic point of view, it will literally be a year to forget for many households and companies. Nevertheless, there is no reason to despair,” Allianz Subran said in a press release on the publication of the Risk Barometer 2023. “On the one hand, the turnaround in interest rates is helping, which will not least benefit millions of savers. The medium-term prospects are also significantly better despite – or perhaps because of – the energy crisis. The consequences, which go beyond the expected recession in 2023, are already becoming apparent: a Accelerated restructuring of the economy towards decarbonization and increased risk awareness in all parts of society, which strengthens social and economic resilience,” said Subran.
Cyber incidents and business disruptions
Cyber incidents and business interruption ranked first and second in the top 10 global business risks in 2023, each with 34 percent of responses.
According to Allianz, cyber incidents are classified as the most important risk for the second year in a row. According to the Allianz Cyber Center of Competence, the frequency of extortionate ransomware attacks will remain significantly higher this year, the insurer announced in its publication of the Risk Barometer 2023, while the average cost of a data breach is higher than ever before and in this year year could even break the 5 million dollar mark. Especially since the war in Ukraine and other geopolitical tensions increase “the risk of a large-scale cyber attack by state-sponsored actors”. In addition, a shortage of skilled workers in the field of cyber security poses additional challenges to improving it.
According to the Allianz Risk Barometer 2023, the risk of business interruption is also likely to remain elevated. Many business models are “susceptible to sudden changes […]which in turn impact revenue and profits.” The most feared jellyfish for business interruption are cyberattacks (45 percent of responses), the energy crisis (35 percent) and natural disasters (31 percent). Rising energy costs in particular have “forced energy-intensive industries to Using energy more efficiently, relocating their production to alternative locations or even considering temporary shutdowns.” Another disruptive factor would be a global recession this year. An increasing number of business insolvencies would threaten supplier failures. Allianz Trade expects the number of corporate insolvencies will increase by 19 percent in 2023.
The biggest business risks in Germany in 2023
In Germany, for the most part, the same risks are seen for the year 2023 as worldwide, only political risks and violence did not make it into the top ten here – but critical infrastructure failures (e.g. power failures) or disruptions did – and the order differs in some cases.
In Germany, business interruptions are in first place (46 percent of the answers), followed by cyber incidents (40 percent) and the energy crisis (32 percent). Legal changes (23 percent) landed in fourth place, and natural disasters (19 percent) in fifth place. Macroeconomic developments (17 percent) rank sixth in Germany, while globally they rank third. Skills shortage and climate change (both 17 percent) follow in seventh and eighth place. Critical infrastructure failures or disruptions and fire and explosions (both 13 percent) occupy the last two places in the top ten biggest business risks in Germany in 2023.
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