Each year AGCS conducts a business survey. In case you have not heard of them before, Allianz Global Corporate & Specialty (AGCS), based in the U.K., is a leading global insurance carrier
For each business survey, they invite business leaders and other experts such as company CEOs to express their views and opinions on what they believe will be the top corporate risks impacting their organizations and those around the world in the coming 12 months.
This year, the study involves nearly 2,800 experts in 92 countries and territories.
As might be expected, all the experts viewed the pandemic as their biggest concern. The survey found that business interruption, the pandemic, and cyberattacks and similar cyber-related incidents will be their number one, two, and three critical concerns in 2021.
“Business interruption, pandemic, and cyber [security] are strongly interlinked, demonstrating the growing vulnerabilities of our highly globalized and connected world,” said AGCS CEO Joachim Muller. “The coronavirus pandemic is a reminder that risk management and business continuity management need to further evolve to help businesses prepare for, and survive, extreme events.”
More humbling, Muller adds that businesses in 2021 must prepare for “more frequent extreme scenarios … on a global scale [such as] cloud storage outages, cyberattacks, natural disasters driven by climate change, or even another disease outbreak.”
The study also pointed out that due to market disruptions, we can expect rising business insolvency rates because of the pandemic. Insolvency is when a business liquidates and goes out of business. Although many have already occurred in 2020, the bulk of them will be happening this year.
There business surveys also pointed out other “risers,” as they were called, include the following:
- Bankruptcies will be up 35 percent, with the most increases happening in the U.S., Brazil, China, and some European countries. (Bankruptcies suggest the business will continue operation.)
- Political risks and violence; more specifically, “political and social unrest is likely, with many countries expected to experience an increase in activity in 2021 and beyond, particularly in Europe and the Americas,” according to AGCS analysts.
- Supply-chain interruptions.
- The potential for power blackouts in certain parts of the world.
- More sophisticated cyberattacks.
As to more sophisticated cyberattacks, Catharina Richter, global head of the Allianz Cyber Center of Competence at AGCS, adds that “attackers are innovating using automated scanning to identify security gaps, attacking poorly secured routers or even using ‘deepfakes’—realistic media content modified or falsified by artificial intelligence.”
However, not all the business survey “risers” are bad news.
The authors of the study also concluded that “COVID-19 will likely spark a period of innovation … accelerating the adoption of technology, hastening the demise of incumbents and traditional sectors, and giving rise to new competitors.” These technological advances will help to “de-risk” organizations and avoid business interruptions.
Additionally, the study found that the experts expect more government legislation and regulation in 2021. Although businesses typically do not welcome more legislation and regulation, in this case, they do. Much of it will be designed to address their concerns about data security.
That the experts predict the pandemic will foster innovation is certainly welcome news. However, our big concern is the fact that they also believe “political and social unrest is likely, with many countries expected to experience an increase in activity in 2021.”
We continue to advise our clients that just because vaccines are rolling out and currently the number of coronavirus cases appears to be going down, that does not mean our cares are behind us. Many people in this country and worldwide are in exceedingly difficult situations. This is what breeds political and social unrest. Moving forward in 2021, we must remain vigilant, ensuring our people and property are kept safe.
As always, we value your feedback, which helps us shape our perspective on recent events, security, and the services we offer.
Chief Executive Officer
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