Allianz Risk Barometer 2016: Digitalization and new technology are emerging as significant new risks for Australian businesses

1 February 2016

Australian businesses are likely to face challenges from a much wider range of disruptive forces in 2016 including new technologies, cyber incidents, macroeconomic developments and political risks according to the 2016 Allianz Risk Barometer of Top Business Risks.

Business Interruption and Supply Chain Risks remain in the top spot globally for the fourth year in succession - with 38% of responses. However, the big movers are in the new tech space, where respondents feel most vulnerable to financial loss.

Market Developments came in second globally but was rated first by Australian respondents for the first time. The combination of increasing automation, digitalization and interconnectivity, and intense competition from non-traditional and agile starts-ups that are better positioned to take advantage of new technology seems to be of most concern in established markets.

At third on the list, Cyber Incidents (cyber-crime, data breaches, IT Failures) is now of greater concern than Natural Disasters (ranked fourth) and New Technologies (impact of increasing interconnectivity and innovation), which has moved to eleventh spot.

Even in the Business Interruption space, respondents are expecting to see more financial loss claims in the future emanating from an increased reliance on new technology and the accompanying interconnectivity of businesses. At this stage, businesses feel powerless to assess and adequately plan for such losses.

The benefits flowing from the increasing digitalization and technological innovation in the new so called “fourth industrial revolution” or Industry 4.0 come with a number of potential new operational, security and strategic risks that may not be factored into existing business continuity and risk management plans.

The report concludes that the future effects of connected industries on the insurance sector are likely to be as follows:

Holger Schaefer, CEO of AGCS Pacific said “in response to these challenges, AGCS has committed significant resources to developing solutions for its corporate client base in the constantly evolving areas of Cyber and Contingent Business Interruption. It will be insurers with the flexibility and capabilities to work together with corporate clients in addressing and finding solutions to these new challenges that are likely to be the winners in this increasingly competitive market.”

To view or download the full Allianz Risk Barometer 2016 visit: www.agcs.allianz.

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Allianz Media Team //