The study determined that business interruption (BI) scenarios, such as breakdown of IT systems, product recall or quality incidents, terrorism, political violence and environmental pollution remain top threats for companies for the seventh year running. These events can bring businesses to a standstill, meaning firms are unable to provide products and services – or customers stay away – having a devastating effect on revenues.
This year, cyber incidents join BI at the top of the ranking, with cyber-crime and technical glitches costing an estimated $600 billion a year: three times as much as the cost of natural catastrophes. With companies’ primary assets often being data, cyber breaches and privacy scandals were often the BI trigger survey respondents feared most.
“Cyber incidents can cripple a company’s operations and severely impair its ability to deliver its services, yet they are just one of many loss triggers that can result in a BI for corporates,” says Volker Muench, Global Practice Leader from Allianz Global Corporate & Specialty.
Changes in legislations and regulation are a concern for businesses around the world, with growing uncertainty over trade wars and tariffs. Due to the world’s current political landscape, legislative change such as the UK’s expected Brexit departure from the European Union in 2019 also poses potential BI threats, with supply chain disruption anticipated.