Allianz Global Corporate & Specialty Africa (AGCS) CEO Thusang Mahlangu
For the annual Allianz Risk Barometer survey, we surveyed about 2712 risk managers who gave their comments, and we had a record of 94 countries and territories contributing to this report representing 23 different industry sectors.
We ask our customers, our risk managers across the globe, large, mid-size and small brokers, and industry trade organizations what they believe are the top three most important risks in the coming year.
The survey has shown cyber risks as the number one concern for businesses globally for the second consecutive year. This is due to the increased connectivity of organizations and the rise of the digital economy. It has also been reported that cyber risks were rated as the number two risk for African and Middle Eastern countries. Critical infrastructure blackouts such as power disruption or failures of aging dams, bridges, rail tracks, are top risks in South Africa from #3 in 2022.
The second most significant risk globally (third in Africa) was business interruption and supplier chain disruption, while macroeconomic developments have shot up seven places in the global ranking, from number 10 to number three. Inflation is a significant concern for companies, which has led central banks to raise interest rates in certain markets. Businesses are also worried about a potential recession in some economies as a result of a slowdown in economic growth.
I could also add the energy crisis, which is interlinked. It is also exacerbated by the war between Russia and Ukraine and the aftermath of Covid 19. That is a new risk in the top 10 in terms of Africa, and it is a new entrance into the top 10 globally.
Those are the top risks that I could mention for now. There are many other risks involved. There is political risk and violence, which is the new entry in the top 10 globally, but it has been a feature in our Africa stats, for the past couple of surveys now.
As part of the insurer’s role, AGCS not only provides cover but also assists clients in managing risks. AGCS risk engineers work closely with clients and share best practices, enabling them to diversify their businesses, invest more into looking into their supply chain risks, and build proper data to improve transparency.
AGCS also guides to clients to avoid disruptions that could be detrimental to their businesses. There is always an opportunity in a crisis, and AGCS helps clients look at risks more opportunistically by identifying opportunities in the face of challenges.
AGCS helps clients investigate supply chain risks and provides support to them. For instance, if a supplier is in a natural disaster-prone area, AGCS advises the client to look at contingency plans and build a web of their supplies. The transparency of data is a significant aspect of managing risks, and AGCS invests time and effort in improving it.
The survey’s results emphasize the importance of managing cyber risks for businesses as the global economy becomes more digital. Businesses must invest in and diversify their businesses while building proper data and contingency plans to minimize disruptions that could have a severe impact on their operations.
The AGCS risk barometer provides valuable insights into the global risk landscape, enabling businesses to manage their risks effectively and efficiently.