Cyber and reputation risks storm into region’s top 10
Following the publication of the Allianz Risk Barometer 2014, the head of Allianz Global Corporate and Specialty Asia Alexander Ankel (pictured) told StrategicRISK that cyber and reputational loss perils were “significantly moving up the global risk rankings” and were new entrants among the top 10 Asia Pacific risks.
“In Asia, regulation is also a major growing concern, particularly as industrialised countries continue to grow at a dramatic pace leading to enhanced regulatory oversight,” he said.
Ankel also suggested that concerns about talent shortages were “notable” as the region grappled with an ageing workforce. “The lack of trained candidates and fierce competition among global companies in the region to hire the best talent compound this challenge,” he said.
Allianz surveyed 405 consultants, underwriters, senior managers and claims experts worldwide, and found that business interruption/supply chain, natural catastrophes and fire/explosion were respectively ranked as the top three risks for businesses in Asia.
Changes in legislation and regulation (4); loss of reputation, brand value (5); cyber crime, IT failures, espionage (6); commodity price increases (7); market fluctuations (8); intensified competition (9 ); and talent shortage, ageing workforce (10), make up the top 10 risks.
Allianz Risk Consulting head of research and development Michael Bruch said that individual risks are so closely linked that the threats are amplified.
Speaking to SR, he warned: “The real critical finding from the report is the interconnectivity between one risk and another. The best example of this interconnectivity is the top rated risks – business interruption and supply chain is heavily linked to the second and third placed risks.
“The interconnected nature of the most threatening risks magnifies the potential impacts of each risk. A risk to one single company can have a large impact on an entire industry.”
He added: “The best advice for risk managers is that they must think in interlinked scenarios to find the right approach.”
Ankel said that enterprise-level risk management as a strategic function was not yet commonplace in many Asian companies. “But we feel this is likely to change in coming years, particularly as companies confront challenges associated with natural catastrophes, business continuity and supply chain management,” he said.