- 9th annual Allianz Risk Barometer survey of 2,718 risk management experts from 102 countries and territories, including Australia
- Changes in legislation and regulation remains the number one business risk in Australia, followed by cyber incidents, and climate change/increasing volatility of weather and market developments
- Globally, cyber incidents are the top risk followed by business interruption and changes in legislation and regulation
Climate change and increasing volatility of weather will be a growing risk for Australian businesses this year according to a global survey of Allianz companies, brokers and insurance industry trade organisations.
Published by Allianz Global Corporate & Specialty (AGCS), the 2020 found ‘climate change/increasing volatility of weather’ (33 per cent) was the third highest risk, up from eighth position in 2019. ‘Changes in legislation and regulation’ (41 per cent) remained the number one risk for Australian business, followed by ‘cyber incidents’ (36 per cent), up from third place, and ‘market developments’ (33 per cent), which was equal third with climate change.
Australia is experiencing above average and record breaking fire conditions, caused in part by extended periods of dry weather. AccuWeather estimates based on an analysis from various sources incorporating independent methods to evaluate the impact of the fires. Given this, AGCS Pacific CEO James Stack said it is understandable climate change is listed as a top three risk for Australian businesses this year.
“Headlines over the past months have been dominated by the unprecedented number of major bushfires in multiple states across the country. Fuelled by rising temperatures and extreme dry weather attributed in part to climate change, these fires not only cause physical property damage, but also potential business interruption as the smoke and fire damage leads to hazardous air quality levels and impacts agricultural supply chains,” Mr Stack said.
“With increased awareness and first-hand experience of the negative impact of climate change, it is no surprise it is considered one of the top three risks for Australian businesses for the first time, behind changes in legislation and regulation and cyber incidents.
“Our thoughts go out to those who have been affected by the current devastating conditions. We understand these are extraordinary circumstances for all Australians and the scale and ferocity of the fires continues to be challenging for local communities, emergency services, charities and animal rescue groups.
“Providing immediate support and access to emergency payments is our upmost priority and we will work with government, authorities and industry leaders to provide support where we can,” Stack concluded.
Rounding out climate change concerns, Australian risk management experts also listed ‘natural catastrophes’ and ‘environmental risks’ in the top 10 risks for Australian businesses in 2020.