Cyber threats and climate change ranked as key business concerns by Allianz
Climate change and cyber security have been highlighted as two of the major concerns for companies that will be subjected to an increasingly "unpredictable business environment" in 2017, new research from financial giant Allianz has found.
The German financial group has today (11 January) released its 2017 Risk Barometer, analysing the global risks that corporates will be faced with this year.
The Barometer found that, as well as attempting to mitigate business interruptions and market volatility, companies are increasingly concerned about the impact of climate change and natural disasters, and the enhanced threat of cyber-attacks induced through the digitalisation of certain markets.
The survey of 1,237 risk experts across 55 countries revealed that almost a quarter were placing climate mitigation and natural catastrophe risks into the business agenda this year. These issues and concerns were especially prominent in Asia.
“Natural catastrophes and climate change worry our customers and society at large,” Allianz SE board member Axel Theis said.
“We must assume that global warming above 1.5 degrees Celsius would intensify climate damages, for example from heat waves and rising sea levels, significantly. It is our task as an insurer to develop solutions for these scenarios and establish prevention and insurance protection for, and together with, our customers and public partners.”
As companies and industries seek new business opportunities through digitalisation and the Internet of Things (IoT) becomes commonplace, corporates are increasingly aware of the risks posed by cyber threats. Allianz found that 30% of respondents are concerned about new digital hazards, with cyber security ranking as the second-highest business concern in the UK and the US.
While corporates located in the telecoms and retail sectors are particularly susceptible to cyber threats, the trend is moving beyond hacking and data breaches to encompass more sectors and countries.
The Barometer notes that the new General Data Protection Regulation – which seeks to improve data protection for individuals - from the European Commission (EC) will add high compliance costs and penalties to businesses. The analysis warns that businesses must think of data as an asset and uncover what preventions will stop it from being used. For smaller companies, the threat of cyber-attacks is underestimated, the analysis finds, with it ranking 6th in regards to business concern.
In fact, European power industry professionals aren’t confident in their ability to implement new connected innovations into network grids, a recent POWER-GEN Industry Study revealed, citing cybersecurity as a risk for the next 20 years.
National grids are already being impacted by this. In December, the Ukrainian Power Grid was subjected to a cyber-attack which affected 230,000 people. The Grid uses IoT aspects and industrial control and automation systems. Attackers were able to sneak malicious firmware into the system, bringing the grid to its knees.
Last year, the World Energy Council (WEC) warned that an uptake in digitisation through devices such as smart metres would open new avenues for cyber-attacks that could damage communities and the economy.
Allianz noted that companies are “bracing for a year of uncertainty” and this certainly rings true in the UK and the US. The analysis notes that the high-profile political changes regarding Brexit and Trump was muddying the waters for business. Respondents were concerned that these political changes would lead to protectionism or government intervention in corporate actions, as well as worries over market access and import and export restrictions.