According to the survey, 45% of respondents in Romania cite the pandemic as the main risk and 30% cite business interruption due to reasons such as breaks in the supply chain. The third biggest risk (25%) cited was legislative unpredictability at a tie with cyber-attacks, fires, macroeconomic factors and natural disasters.
“The Allianz Risk Barometer 2021 is clearly dominated by the Covid-19 trio of risks. Business interruption, pandemic and cyber are strongly interlinked, demonstrating the growing vulnerabilities of our highly globalized and connected world. “The coronavirus pandemic is a reminder that risk management and business continuity management need to further evolve in order to help businesses prepare for, and survive, extreme events. While the pandemic continues to have a firm grip on countries around the world, we also have to ready ourselves for more frequent extreme scenarios, such as a global-scale cloud outage or cyber-attack, natural disasters driven by climate change or even another disease outbreak,” said Joachim Müller, CEO of Allianz Global Corporate & Specialty (AGCS).
The Covid-19 crisis continues to represent an immediate threat to both individual safety and businesses, reflecting why pandemic outbreak has rocketed 15 positions up to #2 in the rankings at the expense of other risks. Prior to 2021, it had never finished higher than #16 in 10 years of the Allianz Risk Barometer, a clearly underestimated risk.
Market developments (#4 with 19%) also climbs up the Allianz Risk Barometer 2021, reflecting the risk of rising insolvency rates following the pandemic. According to Euler Hermes, the bulk of insolvencies will come in 2021. The trade credit insurer’s global insolvency index is expected to hit a record high for bankruptcies, up 35% by the end of 2021, with top increases expected in the US, Brazil, China and core European countries.
Further, Covid-19 will likely spark a period of innovation and market disruption, accelerating the adoption of technology, hastening the demise of incumbents and traditional sectors and giving rise to new competitors.
Other risers include Macroeconomic developments (#8 with 13%) and Political risks and violence (#10 with 11%) which are, in large part, a consequence of the coronavirus outbreak, too. Fallers in this year’s survey include Changes in legislation and regulation (#5 with 19%), Natural catastrophes (#6 with 17%), Fire/explosion (#7 with 16%), and Climate change (#9 with 13%), all clearly superseded by pandemic concerns.
In Central and Eastern Europe, changes in legislation and regulation remain of real concern and are cited among top three risks in Romania, Poland, Bulgaria or Hungary.
“The consequences of the pandemic – wider digitalization, more remote working and the growing reliance on technology of businesses and societies – will likely heighten Business Interruption risks in coming years. However, traditional physical risks will not disappear and must remain on the risk management agenda. Natural catastrophes, extreme weather or fire remain the main causes of Business Interruption for many industries and we continue to see a trend for larger losses over time,” explained Philip Beblo, expert in AGCS’s global Property underwriting team.
The Allianz Risk Barometer is an annual report identifying the top corporate risks for the next 12 months and beyond, based on the insight of more than 2,700 risk management experts from 92 countries and territories.