Top Risks You Need to be Concerned About in 2021

Most boards and executive teams review, at least annually, the corporate Risk Registers prepared by their organization’s management. To ensure proper prioritization, a Risk Register should be regularly updated to capture new and emerging risks and to reflect changing internal and external conditions. Senior leadership will benefit from a quick review of the new 2021 Allianz Risk Barometer to compare their company’s Risk Registers with the risks identified by 2,769 risk management experts from 92 countries and territories who participated in the study. The Allianz Risk Barometer identifies important corporate perils for the next 12 months and beyond, and of interest to you will be the new and emerging risks identified.

Respondents were questioned through October and November 2020. The survey focused on organizations of all sizes. Business interruption (#1 with 41% responses) and Pandemic outbreak (#2 with 40%) are this year’s top business risks with Cyber incidents (#3 with 40%) ranking a close third.

Pandemic outbreak rockets to #2 from #17 and is seen as main cause of business interruption in 2021, followed by cyber. Companies look to de-risk supply chains and boost business continuity management for extreme events.

Businesses must Focus on Supply Change and Business Interruption planning

According to Allianz Risk Barometer respondents, improving business continuity management is the main action companies are taking in order to de-risk their supply chains and make them more resilient in the face of pandemic risk. According to a survey of European risk managers, 46% expect to make changes to supply chains following the pandemic, of which 70% intend to find alternative suppliers.

Society’s growing reliance on technology and the threat posed by cyber is a particular area of concern. Technology is a double-edged sword for business interruption. While digitalization can be a useful tool for business continuity, if it is not done properly, for example by switching to remote working and process monitoring or online sales and servicing without providing proper security, it also brings new risks.

Climate Change can no longer be Ignored

According to Allianz Risk Barometer respondents, the rapidly unfolding physical loss impact which climate change creates for companies is the most significant exposure (example, Australian and USA wild fires), followed by its impact on supply chains, customers and communities. Beyond the physical loss impact of damage from natural catastrophes or extreme weather events to business assets and property, there is also growing concern about how increases in global temperatures or greater flood risks in key locations could significantly affect future operations, facilities, workforces and communities and how to plan for such scenarios.

Each country faces quite different conditions, for example, Political Risk is rampant in some countries but not others. The Study provides a breakdown per country of the top three risks, but the global consensus recognizes the following prioritization:

  1. Business Interruption
  2. Pandemic outbreak
  3. Cyber incidents
  4. Market developments
  5. Changes in legislation and regulation
  6. Natural catastrophes
  7. Fire, explosion
  8. Macroeconomic developments
  9. Climate change/increasing volatility of weather
  10. Political risks and violence

Click here to review the Allianz Risk Barometer

Allianz Global Corporate & Specialty (AGCS) is a leading global risk management and corporate insurance provider. Annually, the company produces the Allianz Risk Barometer, one of the most comprehensive studies of risks facing domestic and international businesses.




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