The top business risks in Switzerland
According to the Allianz Risk Barometer 2019, cyber incidents are one of the biggest business risks, along with business interruptions. For the first time, both risks rank almost equally at the top of the global ranking.
In the ranking of the largest Business risks for Switzerland saw some surprising changes this year: Although the risk of a business interruption (58%) continues to dominate from a company perspective, the fear of a cyber incident rose by one rank to second place (48%). Concerns about legal changes in the economic environment, caused for example by trade wars, tariffs, economic sanctions or the still uncertain Brexit negotiations, also took third place in the Swiss ranking for the first time (29%), ranking on a par with the risk of natural disasters (29%). New in the top ten places are concerns about a shortage of skilled workers (15%) and a loss of reputation (10%).
"The environment for companies has become more unpredictable, the risks have increased - this is clearly shown by the survey of risk experts. This makes it all the more important to recognize the risk potential in the company at an early stage and to take action," emphasizes Gregor Huber, Head of Corporate Insurance at Allianz Suisse.
Insurance companies in particular, with their risk expertise, are important partners here, he says, as they provide support in risk analysis. For example, the company recently expanded its cyber insurance for SMEs to include the additional coverage "Cyber Crime - Social Engineering". According to the insurance company, this covers damage caused by fraudulent instructions and invoices.
Losses from cyber incidents significantly higher than natural hazards
The growing concern over cyber incidents follows a year of numerous data scandals, hacker attacks and IT mishaps. "We are now at a point where cyber is as important to businesses as traditional risks," says Jens Krickhahn, Practice Leader Cyber, AGCS Central and Eastern Europe.
According to data, cybercrime today costs an estimated $600 billion (520 billion euros) per year, up from $445 billion (385 billion euros) in 2014 (source: Center for Strategic and International Studies). This compares to an average economic loss of $208 billion (180 billion euros) from natural disasters over the past decade - only about one-third, he said. While criminals are using more innovative methods for data theft, online fraud or cyber extortion, the threat from hacker groups closely linked to nation states is also growing, he said. They aim to attack operators of critical infrastructure or steal valuable data or trade secrets from foreign companies.
Business interruptions: Cyber incidents before fire
Business interruption (BI) leads the "Allianz Risk" barometer for the seventh year in a row (cf. Top risks). However, the scenarios and triggers are becoming increasingly diverse and complex, Allianz writes. In addition to fire and natural disasters, IT failures, product recalls, quality problems, terrorism, political unrest or environmental pollution are increasingly leading to business interruption. A recent claims analysis by AGCS highlights the growing importance of business interruption, he said: According to the study, almost all major property losses now include a BU element, which usually accounts for the largest share of the loss. It is also noticeable that cyber and BU risks are increasingly linked, as ransomware attacks or IT failures often lead to business and service interruptions. According to the Allianz Risk Barometer, cyber incidents are the most feared cause of business interruption (50% of responses), followed by fire/explosion (40%) and natural disasters (38%).
Legal changes: New risks in 2019
2018 was a turning point for global trade - accordingly, companies in the export nation of Switzerland are also increasingly concerned about legal changes in the economic environment. The trade war between the United States and China, rising tariffs and economic sanctions (Russia, Iran) are weighing on foreign trade, according to the Allianz release. In 2019, further risks would emerge from the upcoming elections in Europe, lower growth prospects for the eurozone and the U.S., and the uncertain outcome of Brexit negotiations.
Source: ots, Allianz
