The primary risk identified for 2020 is associated with technology. There is no doubt that I.T. and automation impact all our lives. No matter what industry you are in, all businesses rely on technology to a given extent.

As technology evolves, it will continue to help improve business productivity, efficiency and customer satisfaction through automation, application of big data and/or artificial intelligence.

However, whilst embracing technology is important for businesses, it is also crucial to identify all the possible threats you may face in advance. Moreover, it is vital to be prepared to cope with such challenges when it arises. Here are the top risks reported in the Allianz Global Risk Barometer.

Rise of Cyber Risks

Using technology has many advantages. We all rely heavily on technology, like working on our mobile devices, being directed by GPS in ourcars or even using Alexa to control various home and work systems. As technology becomes increasingly pervasive, there are even more cyber-attacks taking place. According to the Allianz Global Risk Barometer, the number one risk for businesses in 2020 were cyber incidents such as cyber-crimes, data breaches and IT failures/outages.

While businesses are currently concerned about such cyber threats, it should not deter anyone from embracing technology as it is important for all businesses. Carefully consider increasing your business insurance support by including cyber coverage to avoid your business falling prey to cyber-attacks.

Business interruption remains a top threat

While business interruption has fallen by one place in rankings this year, it remains a primary global threat for companies over the past eight years according to the Allianz Global Risk Barometer.

There are new factors that increasingly contribute to business interruption including digital supply chains, cyber incidents and even political disruption such as the civil unrest in Hong Kong, resulting in property damage and loss of income. Other causes such as fire and natural catastrophes are also contributing causes. Business owners can prevent such massive losses under similar circumstances,by selecting the right policies required to minimise their risks.

Growing threats from climate change

It is apparent that climate change is affecting the world. Businesses have expressed their increasing concerns. In Asia, flooding remains the main issue encountered. However, with the intensifying natural catastrophes experienced globally, business owners should defend against other potential risks like infrastructure and supply chain interruptions which may be detrimental to any business.

Being prepared enables you to avoid disruption to your business operation and minimise potential losses. It is important to review your business insurance and additional coverage to ensure that your business is fully covered from any such natural calamities.

Here are the top 10 global business risks for 2020 based on the Allianz Global Risk Barometer:

1. Cyber incidents (e.g. cybercrime, IT failure/outage, data breaches, fines and penalties)
2. Business interruption including supply chain disruption
3. Changes in legislation and regulation (e.g. trade wars and tariffs, economic sanctions, protectionism, Brexit, Euro-zone disintegration)
4. Natural catastrophes (e.g. storms, floods and earthquakes)
5. Market developments (e.g. volatility, intensified competition/new entrants, M&A, market stagnation, market fluctuation)
6. Fire and explosion
7. Climate change / increasing volatility of weather.
8. Loss of reputation or brand value
9. New technologies (e.g. impact of artificial intelligence, autonomous vehicles, 3D printing, Internet of Things, nanotechnology, blockchain)
10. Macroeconomic developments (e.g. monetary policies, austerity programmes, commodity price increase, deflation, inflation)

Based on the findings this year, most countries had concurred regarding the top two business risks; cyber-threats and business interruption. Other factors that generated increased concern compared to last year were legislation and regulation, climate change, loss of reputation or brand value and macroeconomic developments.

If your business is insured, it is highly advisable to review your current policies and ensure you have all the necessary coverage required to protect your business from all possible threats. If you do not have business insurance, you can view various plans based on your business industry on bizCover.com.

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