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As a school that is 100% committed to being environmentally responsible, Maritzburg College is proud to showcase its latest initiative – the installation of solar panels covering the roof of the school’s Alan Paton Memorial Hall. The installation of the panels was completed in December 2021 and the system is already fully operational. The College team believes in clean green renewable energy wherever possible. Its primary goal was to reduce College's carbon footprint, and meet its biggest demand during daylight hours. This installation gives the school an uninterrupted power supply should the ESKOM grid go down. 

Renewable energy reduces the use of fossil fuels that add to pollution in the country, and as a responsible and environmentally conscious organisation, the school is committed to play its part in assisting ESKOM by reducing demand on their infrastructure that is severely under pressure. 

College is now generating up to 212 KW of renewable energy from the sun. Its current demand of 75% of the harnessed daylight power reduces reliance on ESKOM-generated power. In addition to the school’s nearly 500 boarders, College has 52 teachers residing on campus with their families, all now on renewable energy, providing a significant financial cost saving. 

Funding for this R2.5 million project came from the school’s Old Boys Association (which celebrates its 125th anniversary this year) and the Maritzburg College Old Boys Trust, for which the school is extremely grateful. 

Key benefits going forward will be securing a stable power supply for the 25-hectare campus, needed to support the education of around 1340 boys, while reducing the school’s dependence on a very expensive and uneconomical generator, and of course, greatly improving the school’s carbon footprint. 

Maritzburg College is proud to continue to lead the way in this significant cost-saving and environmentally conscious initiative.

For more information, visit www.maritzburgcollege.co.za

Allianz Risk Barometer 2022: Cyber perils outrank Covid-19 and broken supply chains as top South African business risk

• 11th Allianz survey: Cyber, business interruption and critical infrastructure blackouts are the top three business risks in South Africa in 2022.
• Pandemic outbreak drops from third to fifth in South Africa and second to fourth position globally as majority of companies are less concerned and feel adequately prepared for future outbreaks.
• Political risks and violence is still a major concern in South Africa as it moves from sixth to fourth following, looting, vandalism caused by civil commotion, protests and riots in 2021
• AGCS CEO Joachim Mueller: “’Business interrupted’ will likely remain the key underlying risk theme for this year. Building resilience is becoming a competitive advantage for companies.”

Johannesburg/London/Munich/New York/Paris/Sao Paulo/Singapore, January 18, 2022

Cyber perils are the biggest concern for companies globally, South Africa, Africa and Middle East and Nigeria in 2022, according to the Allianz Risk Barometer. The threat of ransomware attacks, data breaches or major IT outages worries companies even more than business and supply chain disruption, natural disasters or the Covid-19 pandemic, all of which have heavily affected firms in the past year.

Globally, cyber incidents tops the Allianz Risk Barometer for only the second time in the survey’s history (44% of responses), Business interruption drops to a close second (42%) and Natural catastrophes ranks third (25%), up from sixth in 2021. Climate change climbs to its highest-ever ranking of sixth (17%, up from ninth), while Pandemic outbreak drops to fourth (22%). The annual survey from Allianz Global Corporate & Specialty (AGCS) incorporates the views of 2,650 experts in 89 countries and territories, including CEOs, risk managers, brokers and insurance experts. View the full global and country risk rankings. Watch the video. 

“’Business interrupted’ will likely remain the key underlying risk theme in 2022,” AGCS CEO Joachim Mueller summarizes. “For most companies the biggest fear is not being able to produce their products or deliver their services. 2021 saw unprecedented levels of disruption, caused by various triggers. Crippling cyber-attacks, the supply chain impact from many climate change-related weather events, as well as pandemic-related manufacturing problems and transport bottlenecks wreaked havoc. This year only promises a gradual easing of the situation, although further Covid-19-related problems cannot be ruled out. Building resilience against the many causes of business interruption is increasingly becoming a competitive advantage for companies.” 

Violence, blackouts rising concerns in South Africa

Political risks and violence and critical infrastructure blackouts are rising concerns for businesses in South Africa. Political risks and violence moved from sixth to fourth following major losses from physical damage, business interruption, and loss of revenue, looting, vandalism caused by civil commotion, protests and riots in 2021. Critical infrastructure blackouts entered the top three risks from sixth showing that companies are concerned about the impact of blackouts on their businesses and the economy.

“Fortunately, large scale terrorism events have declined drastically in the last five years. However, the number, scale and duration of riots and protests in the last two years is staggering and we have seen businesses suffering significant losses,” says Bjoern Reusswig, Head of Global Political Violence and Hostile Environment Solutions at AGCS. “Civil unrest has soared, driven by protests on issues ranging from economic hardship to police brutality which have affected citizens around the world. And the impact of the Covid-19 pandemic is making things worse – with little sign of an end to the economic downturn in sight, the number of protests is likely to continue climbing.” 

“Preparation is key – in particular for exposed sectors such as retail,” explains Thusang Mahlangu AGCS CEO in South Africa. “Businesses need to review their business continuity plans (BCP) and should be aware of what is happening around them. Typically, these only focus on national catastrophes, but there is a need for BCP plans to address political disturbances and other types of business disruption like cyber. Having defined, and preferably tested, procedures in place is crucial – these should include staff, client and general communication and social media plans. It is imperative for companies to think deeply about how they can best protect their assets and people.”

Ransomware drives cyber concerns while awareness of BI vulnerabilities grows

Cyber incidents ranks as a top three peril in most countries and regions surveyed including South Africa, Nigeria and Africa and Middle East. The main driver is the recent surge in ransomware attacks, which are confirmed as the top cyber threat for the year ahead by survey respondents (57%). Recent attacks have shown worrying trends such as ‘double extortion’ tactics combining the encryption of systems with data breaches; exploiting software vulnerabilities which potentially affect thousands of companies (for example, Log4J, Kaseya) or targeting physical critical infrastructure (the Colonial pipeline in the US). Cyber security also ranks as companies’ major environmental, social and governance (ESG) concern with respondents acknowledging the need to build resilience and plan for future outages or face the growing consequences from regulators, investors and other stakeholders.

“Ransomware has become a big business for cyber criminals, who are refining their tactics, lowering the barriers to entry for as little as a $40 subscription and little technological knowledge. The commercialization of cyber crime makes it easier to exploit vulnerabilities on a massive scale.We will see more attacks against technology supply chains and critical infrastructure,” explains Scott Sayce, Global Head of Cyber at AGCS. 

Business interruption (BI) ranks as the second most concerning risk globally and South Africa, Africa and Middle East and Madagascar. However it ranked first in Ghana, Kenya, Morocco and Namibia. In a year marked by widespread disruption, the extent of vulnerabilities in modern supply chains and production networks is more obvious than ever. According to the survey, the most feared cause of BI is cyber incidents, reflecting the rise in ransomware attacks but also the impact of companies’ growing reliance on digitalization and the shift to remote working. Natural catastrophes and pandemic are the two other important triggers for BI in the view of respondents.

In the past year post-lockdown surges in demand have combined with disruption to production and logistics, as Covid-19 outbreaks in Asia closed factories and caused record congestion levels in container shipping ports. Pandemic-related delays compounded other supply chain issues, such as the Suez Canal blockage or the global shortage of semiconductors after plant closures in Taiwan, Japan and Texas from weather events and fires.

“The pandemic has exposed the extent of interconnectivity in modern supply chains and how multiple unrelated events can come together to create widespread disruption. For the first time the resilience of supply chains has been tested to breaking point on a global scale,” says Philip Beblo, Property Industry Lead, Technology, Media and Telecoms, at AGCS.

According to the recent Euler Hermes Global Trade Report, the Covid-19 pandemic will likely drive high levels of supply chain disruption into the second half of 2022, although mismatches in global demand and supply and container shipping capacity are eventually predicted to ease, assuming no further unexpected developments.

Awareness of BI risks is becoming an important strategic issue across entire companies. “There is a growing willingness among top management to bring more transparency to supply chains with organizations investing in tools and working with data to better understand the risks and create inventories, redundancies and contingency plans for business continuity,” says Maarten van der Zwaag, Global Head of Property Risk Consulting at AGCS.

Pandemic preparations improve. Next up – making businesses more weatherproof

Pandemic outbreak remains a major concern for companies but drops from third to fifth in South Africa and second to fourth position globally (although the survey predated the emergence of the Omicron variant). While the Covid-19 crisis continues to overshadow the economic outlook in many industries, encouragingly, businesses do feel they have adapted well. The majority of respondents (80%) think they are adequately or well-prepared for a future incident. Improving business continuity management is the main action companies are taking to make them more resilient.

The rise of Natural catastrophes and Climate change to third and sixth position globally respectively is telling, with both upwards trends closely related. Climate change moved up one place to sixth in South Africa and came in as new entrant in Africa and Middle East at tenth position. Recent years have shown the frequency and severity of weather events are increasing due to global warming. For 2021, global insured catastrophe losses were well in excess of $100bn – the fourth highest year on record. Hurricane Ida in the US may have been the costliest event, but more than half of the losses came from so-called secondary perils such as floods, heavy rain, thunderstorms, tornados and even winter freezes, which can often be local but increasingly costly events. Examples included Winter Storm Uri in Texas, the low-pressure weather system Bernd, which triggered catastrophic flooding in Germany and Benelux countries, the heavy flooding in Zhengzhou, China, and heatwaves and bushfires in Canada and California.

Allianz Risk Barometer respondents are most concerned about climate-change related weather events causing damage to corporate property (57%), followed by BI and supply chain impact (41%). However, they are also worried about managing the transition of their businesses to a low-carbon economy (36%), fulfilling complex regulation and reporting requirements and avoiding potential litigation risks for not adequately taking action to address climate change (34%).

“The pressure on businesses to act on climate change has increased noticeably over the past year, with a growing focus on net-zero contributions,” observes Line Hestvik, Chief Sustainability Officer at Allianz SE. “There is a clear trend for companies towards reducing greenhouse gas emissions in operations or exploring business opportunities for climate-friendly technologies and sustainable products. In the coming years, many corporate decision-makers will be looking even more closely at the impact of climate risks in their value chain and taking appropriate precautions. Many companies are building up dedicated competencies around climate risk mitigation, bringing together both risk management and sustainability experts.”

Businesses also have to become more weatherproof against extreme events such as hurricanes or flooding. “Previous once-in-a-century-events may well occur more frequently in future and also in regions which were considered ‘safe’ in the past. Both buildings and business continuity planning need to become more robust in response,” says van der Zwaag.

Other risers and fallers in this year’s Allianz Risk Barometer:

• Shortage of skilled workforce(13%) is a new entry in the top 10 risks at number nine globally and eighth in South Africa.  Attracting and retaining workers has rarely been more challenging. Respondents rank this as a top five risk in the engineering, construction, real estate, public service and healthcare sectors, and as the top risk for transportation.
• Changes in legislation and regulation remains fifth (19%) globally but moves down three places to seventh in South Africa. Prominent regulatory initiatives on companies’ radars in 2022 include anti-competitive practices targeting big tech, as well as sustainability initiatives with the EU taxonomy scheme.
• Fire and explosion(17%)is a perennial risk for companies, ranking seventh as in last year’s survey globally and comes in as a new entrant at number nine in South Africa. Market developments (15%) falls from fourth to eighth year-on-year and Macroeconomic developments(11%) falls from eighth to 10th.

For further information please contact:

Johannesburg: Lesiba Sethoga +27 112147948   This email address is being protected from spambots. You need JavaScript enabled to view it.

London: Ailsa Sayers  +44 203 451 3391  This email address is being protected from spambots. You need JavaScript enabled to view it.

Munich: Heidi Polke  +49 89 3800 14303  This email address is being protected from spambots. You need JavaScript enabled to view it.

Daniel Aschoff  +49 89 3800 18900  This email address is being protected from spambots. You need JavaScript enabled to view it.

New York: Sabrina Glavan +1 973 876 3902  sabrina.glavanThis email address is being protected from spambots. You need JavaScript enabled to view it.

Paris: Florence Claret   +33 158 85 88 63  This email address is being protected from spambots. You need JavaScript enabled to view it.

Rotterdam: Olivia Smith  +27 11 214 7928   This email address is being protected from spambots. You need JavaScript enabled to view it.

Sao Paulo: Camila Corsini +55 11 3527 0235  This email address is being protected from spambots. You need JavaScript enabled to view it.

Singapore: Wendy Koh  +65 6395 3796    This email address is being protected from spambots. You need JavaScript enabled to view it.

About Allianz Global Corporate & Specialty

Allianz Global Corporate & Specialty (AGCS) is a leading global corporate insurance carrier and a key business unit of Allianz Group. We provide risk consultancy, Property-Casualty insurance solutions and alternative risk transfer for a wide spectrum of commercial, corporate and specialty risks across 10 dedicated lines of business.

Our customers are as diverse as business can be, ranging from Fortune Global 500 companies to small businesses. Among them are not only the world’s largest consumer brands, tech companies and the global aviation and shipping industry, but also satellite operators or Hollywood film productions. They all look to AGCS for smart answers to their largest and most complex risks in a dynamic, multinational business environment and trust us to deliver an outstanding claims experience.

Worldwide, AGCS operates with its own teams in 31 countries and through the Allianz Group network and partners in over 200 countries and territories, employing around 4,400 people. As one of the largest Property-Casualty units of Allianz Group, we are backed by strong and stable financial ratings. In 2020, AGCS generated a total of €9.3 billion gross premium globally.

For more information please visit http://www.agcs.allianz.com/ or follow us on Twitter @AGCS_Insurance and LinkedIn.

These assessments are, as always, subject to the disclaimer provided below.

Cautionary note regarding forward-looking statements

This document includes forward-looking statements, such as prospects or expectations, that are based on management's current views and assumptions and subject to known and unknown risks and uncertainties. Actual results, performance figures, or events may differ significantly from those expressed or implied in such forward-looking statements.

Deviations may arise due to changes in factors including, but not limited to, the following: (i) the general economic and competitive situation in the Allianz’s core business and core markets, (ii) the performance of financial markets (in particular market volatility, liquidity, and credit events), (iii) adverse publicity, regulatory actions or litigation with respect to the Allianz Group, other well-known companies and the financial services industry generally, (iv) the frequency and severity of insured loss events, including those resulting from natural catastrophes, and the development of loss expenses, (v) mortality and morbidity levels and trends, (vi) persistency levels, (vii) the extent of credit defaults, (viii) interest rate levels, (ix) currency exchange rates, most notably the EUR/USD exchange rate, (x) changes in laws and regulations, including tax regulations, (xi) the impact of acquisitions including and related integration issues and reorganization measures, and (xii) the general competitive conditions that, in each individual case, apply at a local, regional, national, and/or global level. Many of these changes can be exacerbated by terrorist activities.

No duty to update

Allianz assumes no obligation to update any information or forward-looking statement contained herein, save for any information we are required to disclose by law.

Privacy Note

Allianz SE is committed to protecting your personal data. Find out more in our privacy statement.

Allianz Risk Barometer 2022: Cyber perils outrank Covid-19 and broken supply chains as top Africa and Middle East business risk

• 11th Allianz survey: Cyber, business interruption and pandemic outbreak are the top three business risks in Africa and Middle East in 2022.
• Pandemic outbreak drops from first to third in Africa and Middle East and second to fourth position globally as majority of companies are less concerned and feel adequately prepared for future outbreaks.
• Political risks and violence is still a major concern in Africa and Middle East as it moves from sixth to fourth due to the number, scale and duration of riots and protests.
• AGCS CEO Joachim Mueller: “’Business interrupted’ will likely remain the key underlying risk theme for this year. Building resilience is becoming a competitive advantage for companies.”

Johannesburg/London/Munich/New York/Paris/Sao Paulo/Singapore, January 18, 2022

Cyber perils are the biggest concern for companies in Africa and Middle East, South Africa, Nigeria and around the world in 2022, according to the Allianz Risk Barometer which launches on January 18, 2022. The threat of ransomware attacks, data breaches or major IT outages worries companies even more than business and supply chain disruption, natural disasters or the Covid-19 pandemic, all of which have heavily affected firms in the past year

Globally, cyber incidents tops the Allianz Risk Barometer for only the second time in the survey’s history (44% of responses), Business interruption drops to a close second (42%) and Natural catastrophes ranks third (25%), up from sixth in 2021. Climate change climbs to its highest-ever ranking of sixth (17%, up from ninth), while Pandemic outbreak drops to fourth (22%). The annual survey from Allianz Global Corporate & Specialty (AGCS) incorporates the views of 2,650 experts in 89 countries and territories, including CEOs, risk managers, brokers and insurance experts. View the full global and country risk rankings. Watch the video. 

“’Business interrupted’ will likely remain the key underlying risk theme in 2022,” AGCS CEO Joachim Mueller summarizes. “For most companies the biggest fear is not being able to produce their products or deliver their services. 2021 saw unprecedented levels of disruption, caused by various triggers. Crippling cyber-attacks, the supply chain impact from many climate change-related weather events, as well as pandemic-related manufacturing problems and transport bottlenecks wreaked havoc. This year only promises a gradual easing of the situation, although further Covid-19-related problems cannot be ruled out. Building resilience against the many causes of business interruption is increasingly becoming a competitive advantage for companies.” 

Violence, changes in legislation and regulation rising concerns in Africa and Middle East

Political risks and violence and changes in legislation and regulationare rising concerns for businesses in Africa and Middle East. Political risks and violence moved from sixth to fourth due to the number, scale and duration of riots and protests such as civil unrest and looting in South Africa. Changes in legislation and regulationmoves up three places for fifth in the region.

“Fortunately, large scale terrorism events have declined drastically in the last five years. However, the number, scale and duration of riots and protests in the last two years is staggering and we have seen businesses suffering significant losses,” says Bjoern Reusswig, Head of Global Political Violence and Hostile Environment Solutions at AGCS. “Civil unrest has soared, driven by protests on issues ranging from economic hardship to police brutality which have affected citizens around the world. And the impact of the Covid-19 pandemic is making things worse – with little sign of an end to the economic downturn in sight, the number of protests is likely to continue climbing.” 

“Preparation is key – in particular for exposed sectors such as retail,” explains Thusang Mahlangu AGCS Africa CEO. “Businesses need to review their business continuity plans (BCP) and should be aware of what is happening around them. Typically, these only focus on national catastrophes, but there is a need for BCP plans to address political disturbances and other types of business disruption like cyber. Having defined, and preferably tested, procedures in place is crucial – these should include staff, client and general communication and social media plans. It is imperative for companies to think deeply about how they can best protect their assets and people.”

Ransomware drives cyber concerns while awareness of BI vulnerabilities grows

Cyber incidents ranks as a top three peril in most countries and regions surveyed including Africa and Middle East, South Africa and Nigeria. It also ranks second in Ghana, fourth in Morocco and Namibia, fifth in Kenya and seventh in Turkey, The main driver is the recent surge in ransomware attacks, which are confirmed as the top cyber threat for the year ahead by survey respondents (57%). Recent attacks have shown worrying trends such as ‘double extortion’ tactics combining the encryption of systems with data breaches; exploiting software vulnerabilities which potentially affect thousands of companies (for example, Log4J, Kaseya) or targeting physical critical infrastructure (the Colonial pipeline in the US). Cyber security also ranks as companies’ major environmental, social and governance (ESG) concern with respondents acknowledging the need to build resilience and plan for future outages or face the growing consequences from regulators, investors and other stakeholders.

“Ransomware has become a big business for cyber criminals, who are refining their tactics, lowering the barriers to entry for as little as a $40 subscription and little technological knowledge. The commercialization of cyber crime makes it easier to exploit vulnerabilities on a massive scale.We will see more attacks against technology supply chains and critical infrastructure,” explains Scott Sayce, Global Head of Cyber at AGCS. 

Business interruption (BI) ranks as the second most concerning risk globally and Africa and Middle East, South Africa, Madagascar and Turkey. However, it ranked first in Ghana, Kenya, Morocco and Namibia. In a year marked by widespread disruption, the extent of vulnerabilities in modern supply chains and production networks is more obvious than ever. According to the survey, the most feared cause of BI is cyber incidents, reflecting the rise in ransomware attacks but also the impact of companies’ growing reliance on digitalization and the shift to remote working. Natural catastrophes and pandemic are the two other important triggers for BI in the view of respondents.

In the past year post-lockdown surges in demand have combined with disruption to production and logistics, as Covid-19 outbreaks in Asia closed factories and caused record congestion levels in container shipping ports. Pandemic-related delays compounded other supply chain issues, such as the Suez Canal blockage or the global shortage of semiconductors after plant closures in Taiwan, Japan and Texas from weather events and fires.

“The pandemic has exposed the extent of interconnectivity in modern supply chains and how multiple unrelated events can come together to create widespread disruption. For the first time the resilience of supply chains has been tested to breaking point on a global scale,” says Philip Beblo, Property Industry Lead, Technology, Media and Telecoms, at AGCS.

According to the recent Euler Hermes Global Trade Report, the Covid-19 pandemic will likely drive high levels of supply chain disruption into the second half of 2022, although mismatches in global demand and supply and container shipping capacity are eventually predicted to ease, assuming no further unexpected developments.

Awareness of BI risks is becoming an important strategic issue across entire companies. “There is a growing willingness among top management to bring more transparency to supply chains with organizations investing in tools and working with data to better understand the risks and create inventories, redundancies and contingency plans for business continuity,” says Maarten van der Zwaag, Global Head of Property Risk Consulting at AGCS.

Pandemic preparations improve. Next up – making businesses more weatherproof

Pandemic outbreak remains a major concern for companies but drops from first to third position in Africa and Middle East and from second to fourth globally (although the survey predated the emergence of the Omicron variant). The risk is ranked in the top three in  Ghana, Kenya, and Namibia. While the Covid-19 crisis continues to overshadow the economic outlook in many industries, encouragingly, businesses do feel they have adapted well. The majority of respondents (80%) think they are adequately or well-prepared for a future incident. Improving business continuity management is the main action companies are taking to make them more resilient.

The rise of Natural catastrophes and Climate change to third and sixth position globally respectively is telling, with both upwards trends closely related. Recent years have shown the frequency and severity of weather events are increasing due to global warming. For 2021, global insured catastrophe losses were well in excess of $100bn – the fourth highest year on record. Hurricane Ida in the US may have been the costliest event, but more than half of the losses came from so-called secondary perils such as floods, heavy rain, thunderstorms, tornados and even winter freezes, which can often be local but increasingly costly events. Examples included Winter Storm Uri in Texas, the low-pressure weather system Bernd, which triggered catastrophic flooding in Germany and Benelux countries, the heavy flooding in Zhengzhou, China, and heatwaves and bushfires in Canada and California.

Allianz Risk Barometer respondents are most concerned about climate-change related weather events causing damage to corporate property (57%), followed by BI and supply chain impact (41%). However, they are also worried about managing the transition of their businesses to a low-carbon economy (36%), fulfilling complex regulation and reporting requirements and avoiding potential litigation risks for not adequately taking action to address climate change (34%).

“The pressure on businesses to act on climate change has increased noticeably over the past year, with a growing focus on net-zero contributions,” observes Line Hestvik, Chief Sustainability Officer at Allianz SE. “There is a clear trend for companies towards reducing greenhouse gas emissions in operations or exploring business opportunities for climate-friendly technologies and sustainable products. In the coming years, many corporate decision-makers will be looking even more closely at the impact of climate risks in their value chain and taking appropriate precautions. Many companies are building up dedicated competencies around climate risk mitigation, bringing together both risk management and sustainability experts.”

Businesses also have to become more weatherproof against extreme events such as hurricanes or flooding. “Previous once-in-a-century-events may well occur more frequently in future and also in regions which were considered ‘safe’ in the past. Both buildings and business continuity planning need to become more robust in response,” says van der Zwaag.

Other risers and fallers in this year’s Allianz Risk Barometer:

• Shortage of skilled workforce(13%) is a new entry in the top 10 risks at number nine.  Attracting and retaining workers has rarely been more challenging. Respondents rank this as a top five risk in the engineering, construction, real estate, public service and healthcare sectors, and as the top risk for transportation.
• Changes in legislation and regulation remains fifth (19%) globally but moves up three places to fifth in Africa and Middle East. Prominent regulatory initiatives on companies’ radars in 2022 include anti-competitive practices targeting big tech, as well as sustainability initiatives with the EU taxonomy scheme.
• Fire and explosion(17%)is a perennial risk for companies, ranking seventh as in last year’s survey. Market developments (15%) falls from fourth to eighth year-on-year globally but moves up two places to seventh in Africa and Middle East. Macroeconomic developments(11%) falls from eighth to 10th and from fourth to seventh in Africa and Middle East.

For further information please contact:

Johannesburg: Lesiba Sethoga +27 112147948   This email address is being protected from spambots. You need JavaScript enabled to view it.

London: Ailsa Sayers  +44 203 451 3391  This email address is being protected from spambots. You need JavaScript enabled to view it.

Munich: Heidi Polke  +49 89 3800 14303  This email address is being protected from spambots. You need JavaScript enabled to view it.

Daniel Aschoff  +49 89 3800 18900  This email address is being protected from spambots. You need JavaScript enabled to view it.

New York: Sabrina Glavan +1 973 876 3902  sabrina.glavanThis email address is being protected from spambots. You need JavaScript enabled to view it.

Paris: Florence Claret   +33 158 85 88 63  This email address is being protected from spambots. You need JavaScript enabled to view it.

Rotterdam: Olivia Smith  +27 11 214 7928   This email address is being protected from spambots. You need JavaScript enabled to view it.

Sao Paulo: Camila Corsini +55 11 3527 0235  This email address is being protected from spambots. You need JavaScript enabled to view it.

Singapore: Wendy Koh  +65 6395 3796    This email address is being protected from spambots. You need JavaScript enabled to view it.

About Allianz Global Corporate & Specialty

Allianz Global Corporate & Specialty (AGCS) is a leading global corporate insurance carrier and a key business unit of Allianz Group. We provide risk consultancy, Property-Casualty insurance solutions and alternative risk transfer for a wide spectrum of commercial, corporate and specialty risks across 10 dedicated lines of business.

Our customers are as diverse as business can be, ranging from Fortune Global 500 companies to small businesses. Among them are not only the world’s largest consumer brands, tech companies and the global aviation and shipping industry, but also satellite operators or Hollywood film productions. They all look to AGCS for smart answers to their largest and most complex risks in a dynamic, multinational business environment and trust us to deliver an outstanding claims experience.

Worldwide, AGCS operates with its own teams in 31 countries and through the Allianz Group network and partners in over 200 countries and territories, employing around 4,400 people. As one of the largest Property-Casualty units of Allianz Group, we are backed by strong and stable financial ratings. In 2020, AGCS generated a total of €9.3 billion gross premium globally.

For more information please visit http://www.agcs.allianz.com/ or follow us on Twitter @AGCS_Insurance and LinkedIn.

These assessments are, as always, subject to the disclaimer provided below.

Cautionary note regarding forward-looking statements

This document includes forward-looking statements, such as prospects or expectations, that are based on management's current views and assumptions and subject to known and unknown risks and uncertainties. Actual results, performance figures, or events may differ significantly from those expressed or implied in such forward-looking statements.

Deviations may arise due to changes in factors including, but not limited to, the following: (i) the general economic and competitive situation in the Allianz’s core business and core markets, (ii) the performance of financial markets (in particular market volatility, liquidity, and credit events), (iii) adverse publicity, regulatory actions or litigation with respect to the Allianz Group, other well-known companies and the financial services industry generally, (iv) the frequency and severity of insured loss events, including those resulting from natural catastrophes, and the development of loss expenses, (v) mortality and morbidity levels and trends, (vi) persistency levels, (vii) the extent of credit defaults, (viii) interest rate levels, (ix) currency exchange rates, most notably the EUR/USD exchange rate, (x) changes in laws and regulations, including tax regulations, (xi) the impact of acquisitions including and related integration issues and reorganization measures, and (xii) the general competitive conditions that, in each individual case, apply at a local, regional, national, and/or global level. Many of these changes can be exacerbated by terrorist activities.

No duty to update

Allianz assumes no obligation to update any information or forward-looking statement contained herein, save for any information we are required to disclose by law.

Privacy Note

Allianz SE is committed to protecting your personal data. Find out more in our privacy statement.

• Euler Hermes expects global supply-chain disruptions to remain high until H2 2022.
• When it comes to inputs from China, Europe is losing the tug-of-war against the US, but reshoring remains more talk than walk.
• Global trade in volume to grow by +5.4% in 2022 and +4.0% in 2023.
• Exports in South Africa to rise by USD+22bn in 2021, USD+5bn in 2022,

PARIS – DECEMBER 9, 2021– Global supply-chain disruptions could remain high until H2 2022 amid renewed Covid-19 outbreaks around the world, China’s sustained zero-Covid policy and demand and logistic volatility during Chinese New Year, according to Euler Hermes’ Global Trade Report. Nevertheless, the trade credit insurer expects trade growth to remain strong through 2022 and 2023, with some clear winners across regions and sectors.

Global supply-chain disruptions will remain high until H2 2022

After exceptionally strong performance since H2 2020, global trade of goods contracted in Q3, especially in advanced and emerging economies. However, advanced economies are suffering more from supply-chain bottlenecks rather than trouble with demand: Euler Hermes finds that production shortfalls are behind 75% of the current contraction in global volume of trade, with the rest explained by transport delays. Looking ahead, rapidly growing orders for new transportation capacity (6.4% of the existing fleet) should turn operational towards the end of 2022 while increased spending on port infrastructure in the US should significantly ease global shipping bottlenecks.

South Africa to see rise in exports

After losing nearly USD-15bn in 2020 vs. 2019 (in goods and services), South Africa should see exports rise by USD+22bn in 2021, USD+5bn in 2022 and USD+2bn in 2023. This brings total South African exports in value terms above the pre-crisis level as soon as in 2021. Sectors that should exhibit the largest export gains in 2022 and 2023 are services, metals and automotives. In terms of target markets, the largest export gains should be derived from China, the United States and Germany.

When it comes to inputs from China, Europe is losing the tug-of-war against the US

Europe is more at risk compared to the US when it comes to the heavy reliance on intermediate inputs from abroad. Without production capacity increases and investments in port infrastructure, the normalization of supply bottlenecks in Europe could be delayed beyond 2022 if demand remains above potential. Euler Hermes finds that the household equipment, consumer electronics, automotive and machinery and equipment sectors are most vulnerable to input shortages.

“China is a key downside risk for Europe: we estimate that a 10% drop in EU imports from China could be a drag of more than -6% on the metal sector, more than -3% on the automotive sector (incl. transport equipment) and more than -1% on computer and electronics,” says Ano Kuhanathan, Senior Sector Advisor at Euler Hermes, which operations through the Allianz Global Corporate & Specialty (AGCS) license in South Africa. 

Yet, reshoring and nearshoring will remain more talk than walk

Despite the ongoing global supply-chain disruption, Euler Hermes finds no clear trend of reshoring or nearshoring of industrial activities so far. The only exception is the UK, which is likely to have faced disruptions due to Brexit. However, protectionism reached a record high in 2021 and should remain elevated, mainly in the form of non-tariff trade barriers (e.g. subsidies, industrial policies).

Overall, global trade will grow by +5.4% in 2022 and +4.0% in 2023

While there is a risk of a double-dip in Q1 2022, Euler Hermes expects a normalization of international trade flows in volume from H2 2022, driven by three factors:

1. A cooling down of consumer spending on durable goods, given their longer replacement cycle and the shift towards more sustainable consumption behaviors.
2. Less acute input shortages as inventories have returned to or even exceeded pre-crisis levels in most sectors, and capex has increased (mainly in the US).
3. Reduced shipping congestions (global orders for new container ships have reached record highs over the past few months, amounting to 6.4% of the existing fleet) and the planned USD17bn spending on port infrastructure in the US.

“Overall, we expect global trade in volume to grow by +5.4% in 2022 and +4.0% in 2023, and then gradually return to its pre-crisis average levels. However, this comes at the expense increased global imbalances. The US will register record-high trade deficits (around USD1.3trn in 2022-2023), mirrored by a record-high trade surplus in China (USD760bn on average). Meanwhile the Eurozone will also see higher-than-average surplus of around USD330bn”, explains Françoise Huang, Senior Economist for Asia-Pacific at Euler Hermes.

And the winners are…

Euler Hermes estimates that the energy, electronics and machinery & equipment sectors should continue to outperform in 2022. But the main export winner globally in 2023 should be automotive, thanks to the backlog of work and lower capex in 2021. At the regional level, Asia-Pacific should continue to be the main export winner in the coming few years (over USD3trn in export gains in 2021-2023).

The ransomware story is getting longer and more complicated and South African organisations are not excluded

JOHANNESBURG, South Africa, December 7, 2021/ -- The KnowBe4 (http://www.KnowBe4.com) and ITWeb Ransomware Survey took a deep look into the South African organisation, finding that ransomware and cybercrime are increasingly impacting organisations on the continent. While many companies (32%) were attacked in 2021, some multiple times (12%), 64% of organisations believe they are prepared, and 67% would not pay the ransom. According to Anna Collard, SVP Content Strategy & Evangelist at KnowBe4 Africa, the South African market with its growing economy and cyber dependence, is becoming increasingly tasty as a cyber extortion snack.

“It is natural for cybercriminal organisations to look at emerging economies for future attacks, as they are often not as prepared as the rest of the world,” she adds. “Many South African sectors have a high cyber dependence and, as we have seen with recent attacks, such as the Department of Justice (DoJ) and Transnet, successful ransomware attacks have a direct impact on economy and infrastructure. Right now, organisations need to collaborate to increase preparedness.”

This preparedness starts with understanding the landscape and recognising how successful extortion attacks can fundamentally impact the business bottom line, and the public sector’s service delivery. The public sector is concerned about its lack of preparedness – only 30% of the respondents in the public sector believed they were prepared enough – when it comes to cybersecurity training and systems, and this is one sector that cannot afford to lose money to a hack. The recent DoJ hack saw thousands of people affected, many in very dehumanising ways, as systems could not process death certificates, manage child support payments and effectively handle court proceedings. This is just one example of how long the tail of extortion crime can be.

“Ransomware, along with other types of extortion cybercrime, require a systemic response that is designed to prevent and mitigate its impact,” says Collard. “Along with understanding how poor security and training can impact the business or public sector services, it is important to recognise how the process works and how professional these organisations have become.”

Companies held to ransom are sent to “shaming sites” where they are then met with a landing page that has a countdown timer – how long they have to pay– and the amount they need to pay. They can then engage with the criminals to negotiate the ransom, receive payment instructions and get their data returned to them or a promise from the criminals that they will not release the stolen data.

The entire kill chain, from start to finish, follows a number of steps. First, one group is used to undertake the initial attack typically by using social engineering tactics such as phishing or by using insecure Microsoft Remote Desktop (MRDP) connections, password guessing or the exploitation of a software weakness to gain access to the network. Once inside, they move laterally across the environment, exfiltrating and encrypting as much data as possible. To add extra pressure, attacks can also include backup destruction, bribing of internal employees or combining the extortion with the threat of taking down systems via distributed denial of service attacks.  Finally, negotiation for the ransom is handled by the ransomware operator.

“There are at last two parties involved in a typical case – the operators and their affiliate partners,” says Collard. “Once the payment has been verified, the victim is sent the decryption tool and regains access to their data.”

Research by Orange Cyber Defense has found that even though there are some countries and sectors that appear to be the most often attacked, there are victims in every country and sector. The U.S., Canada, France, UK, Germany and Italy are the most often attacked due to victim attractiveness following national GDP. Industries most consistently tracked on leak sites were manufacturing followed by professional scientific services and sectors with a strong reliance on technology.

“It does not matter what sector or country you are in, what matters is how weak your defences are,” concludes Collard. “In South Africa, it is becoming incredibly important for companies to adequately prepare against this growing cyber extortion threat.”

Distributed by APO Group on behalf of KnowBe4.

SOURCE: KnowBe4

As the world heads into almost two years of living through the Covid-19 pandemic, significant shifts   have taken place in terms of what people are insuring, as well as discovering new risks that they previously were not exposed to, or certainly not as aware of as they are now.

“Aspects such as increased digitisation and cyber risks and identity fraud have come up strongly, driving behaviour has changed completely and people are driving their vehicles for much longer and delaying new car purchases. Pet adoptions have soared as more people work from home and spend more time with their pets. Healthcare has also received focused attention - both in terms of cost of care and having access to quality healthcare in a crisis,” explains Carl Moodley, Chief Underwriting & Claims Officer atGENRIC Insurance Company Limited.

“Given the changing nature of our behaviour and personal risk, the demand for niche insurance solutions has consistently grown month-on-month as consumers seek certainty of protection against very specific exposures.GENRIC has seen this trend across various lines of business, notably in areas such as gap cover, mechanical warranty and service and maintenance motor covers, cybercrime and medical emergency services. While cost-containment has been a big drive for many consumers, there is also a greater appreciation of the need for risk protection and avoiding any hard financial knocks of an uninsured peril occurring, especially when finances are already strained,” adds Carl.

“The growing complexity and inter-related nature of risks is also seeing a return to professional broker advice and guidance. As consumers find themselves in increasingly volatile times, and uncertain of how to balance costs versus potential risks, many consumers wanted to avoid the pitfalls inherent with a D-I-Y approach to their risk. The old adage of ‘you don’t know what you don’t know’ rang true for many people who sought out professional advice – notably on the healthcare funding front,” he says.

GENRIC Insurance Company unpacks some of the key trends and shifts in personal risk that it has noted over the last year, and what this means for insurance and risk planning in 2022.

• Gap insurance becomes non-negotiable as members buy down on medical schemes– As consumers and employers increasingly buy down on medical scheme benefits due to financial pressures, gap insurance becomes even more crucial to cover potential in-hospital tariff shortfalls on treatment, which occurs when specialists charge more than the rate at which medical schemes pay, particularly prevalent on lower benefit options. Without gap cover, the patient would be responsible for any shortfall from their own pocket.
  
  
• Migration to health insurance– GENRIC has seen a sharp uptick in health insurance applications as many consumers and even employer groups find themselves unable to afford the high costs of medical scheme benefits, but don’t want to lose access to quality private healthcare when they need it most. The benefit of health insurance is that it provides a range of options on cover from basic primary care only options, hospital only and combined in-and-out-of-hospital benefits and is cheaper than medical scheme benefits because it does not cover Prescribed Minimum Benefits. Instead, medical insurance specifies its benefits and pays out a fixed Rand amount towards them up to a defined sum in the policy.
  
  
• Mechanical Warranty and Service and Maintenance Insurance in demand as cars are driven for longer - Millions of South Africans are choosing to drive their vehicles for much longer and are delaying new vehicle purchases, which exposes them to the risks of ‘out of manufacturer warranty’ breakdowns. In such circumstances, a Mechanical Warranty Insurance policy covers the repair of your car due to mechanical failures or breakdown once it falls outside of its factory warranty period. Following a similar trend that comes with driving vehicles for longer, demand for Service and Maintenance Insurance. Insteadof having to pay for the vehicle service in one large upfront lump sum, this cover provides for a much smaller, more affordable monthly payment which will go towards the cost of the car service. As cost pressures mount, vehicle owners are looking to rather pay a few hundred Rand per month versus a large sum of a few thousand Rand, especially if it’s a major service.

• Increased digital adoption sees need for personal cyber protection:  As eCommerce and reliance on digital banking and transactional platforms grows, cyber or online risks have soared. ‘Card-not-present’ (CNP) fraud on South African-issued credit cards remains the leading contributor to gross fraud losses in the country, accounting for 79.5% of all losses, while the country has seen an increase of more than 100% in mobile banking application fraud, according to an Accenture report.¹  It’s one of the key reasons why personal cyber risk insurance is now as important as home, vehicle and life insurance in one’s personal financial planning portfolio.
  
  
• Mobility patterns have changed– remote working and learning which is already becoming an established trend means people are driving their vehicles much less. Less time on the road also means much lower risk for accidents and theft. The integration of vehicle telematics will be increasingly important in insurance solutions that aim to reduce insurance premiums based on reduced mileage and better driving behaviour. You can expect to see a big shift to insurance solutions with a ‘pay-as-you-go’ component as consumers drive a lot less and thus expect to pay less for their reduced risk.
  
  
• Pet adoptions soared during the pandemic - While relationships and marriages have taken strain during the various lockdown levels and increased time spent at home, other relationships have thrived. People have spent more time with their pets than ever before, and pet adoptions have gone up too. This has driven new demand for Pet Insurance - pet owners want the reassurance that if things do go wrong and their pet gets sick or injured, they’ll never have to decide between their finances and Fido’s health and wellbeing.
  
  
• Crime is on the rise - As the economy falters and more people find themselves unemployed and desperate, the crime rate is increasing. Taking extra safety and security measures at home and on the road are essential mitigating measures, as is checking that insurance covers are in place for all potential scenarios. Insurance solutions that add extra layers of protection, telematics and private response to emergency situations are increasingly in demand.

“Consumers have been rattled by the ongoing pandemic uncertainty, and there is now a greater appreciation of just how unpredictable and far-reaching risk can be. As a result, consumers are wanting the absolute certainty that they are covered for specific risks – whether that be a car breakdown, an unexpected hospitalisation or a sick pet. As personal circumstances continue to change and evolve, the guidance and advice of a professional broker will prove invaluable in structuring an insurance and risk management strategy that’s fit for purpose,” concludes Carl.

For more information go to www.genric.co.za.

GENRIC Insurance Company Limited (FSP 43638) is an authorised Financial Services Provider and licensed non-life Insurer.

References:

• Accenture – Insight into the cyber threat landscape in South Africa, published May 2020, available from https://www.accenture.com/za-en/insights/security/cyberthreat-south-africa[Accessed 10 Nov 2020]

One of the biggest mistakes companies make when evaluating risks to their business continuity is to neglect to consider and acknowledge how dependent their annual revenues are on technology platforms over which they have no control.

For corporate entities, this is often measured in millions of Rands, and yet this clear and present danger is often ignored or grossly underestimated, according to Escrow Europe Managing Director, Andrew Stekhoven.

For nearly two decades, during which time his company received an Institute of Risk Management of South Africa (IRMSA) award for its role in assisting South African businesses manage their mission critical business risks, Stekhoven has pointed out that most commercial and governmental institutions are often entirely dependent on software over which they have limited or no control.

Software, he stresses, which in the case of a natural or man-made disaster, could become ‘orphanware’ in less time than it takes to log on to Google.

‘Orphanware’ is software that is no longer supported by the company that developed it, and can come into being for a number of reasons, ranging from the obvious, for instance, bankruptcy on the part of the supplier, to the more subtle - what happens if a competitor acquires the supplier with the sole purpose of killing a competitive product.

One of South Africa’s most high-profile cases in the mid-2000s involved Prestasi, which lost its entire customer database in a highly-publicised dispute with its then-IT outsource provider, Dexdata. Prestasi was reduced to managing its business without access to its own customer database. A court order eventually compelled Dexdata to return the data, but the returned tapes were unreadable.

One way to mitigate operational risks associated with dependency on software is to purchase a Source Code License, a situation actively discouraged by the developers because it gives the purchaser direct access to the ‘secret code’ in which the application is written.

An alternative with far more appeal is for both parties to enter into an active escrow agreement as a simple method of guaranteeing access to maintainable information systems by the software end-user should certain predefined commitments such as warranty, support and maintenance are not honoured by the software supplier irrespective of its stability or commercial stability.

“An active escrow arrangement entails verifying the deposit material to ensure that the source code is present and accurately and completely reflects the software in operation at the end user’s site,” says Stekhoven.

“Passive escrow, which does not ensure the source code is verified to confirm that what was deposited was in fact the complete set of source code, associated technical documentation etc, offers no proper reassurance that the source code material is present or that it will be of any use in the event of a release.

“In fact, the exposure as ‘foilware’ of the Lorenzo patient record system at the heart of Britain's £10 billion ($25 billion) National Health Service IT upgrade highlighted the importance of active – as opposed to passive – software escrow.”

Foilware is a term used for software that is delivered late, not at all or doesn’t do the task for which it was commissioned. The Lorenzo system was initially scheduled for release in March 2004 but, in 2010, delays with its delivery were bringing the NHS close to collapse.

These delays caused David More, an independent consultant and e-health blogger in Australia (aushealthit.blogspot.com) to point out that New South Wales Health should not rely on its escrow arrangements with iSoft to protect the rollout of patient administration systems.

iSoft Australia was supplying the same product for various state health projects, including Victoria's $323 million HealthSmart. More said there was no point holding obsolete software code in escrow. All that does is provide a false sense of security that something can be done when iSoft fails.

“That’s vital point right there,” says Stekhoven, “and another is that a properly considered active software escrow agreement will protect the business from other challenges should it call for the release of the source code from escrow.”

Here Stekhoven was referring to a recent court case in the USA. A company called National Quality Assurance (NQA) used software developed by Jadian Enterprises to support its registration and certification services.

As part of the agreement between the two, they entered into an escrow agreement which required the escrow agent release the source code to NQA in the event of a failure to perform by Jadian Enterprises ‘for the sole purpose of continuing the benefits afforded’ by the licensing agreement.

Jadian Enterprises was bought out by another company, but failed to provide the same level of service as the original Jadian Enterprises had, prompting NQA to halt paying subscription fees and to request release of the source code from the escrow agent. The agent did so, and NQA hired another provider to develop and maintain the source code.

Jadian and its owner, Epazz, Inc., sued NQA for breach of contract and trade secret misappropriation. The district court granted summary judgment in favour of NQA, finding no misappropriation of a trade secret and that NQA had not acquired the source code by improper means.

“This case is a good reminder for both customers and developers alike to clearly define the bounds of the use and/or transfer of source code and trade secret material. Customers having doubts or concern as to a software vendor’s ability to perform should strongly consider escrow agreements, especially where the software is central or key to the customer’s operations or it has fears of the vendor going bankrupt,” adds Stekhoven.

“A sound, common sense approach to mitigating disaster, active software escrow provides cost effective relief and security for a business. In today’s technology dependent business world, active escrow agreements between an end-user organisation and the supplier of the technology it utilises are a necessity, not a nice to have.”

Should you have any doubt about your need for active software escrow, answer these three questions:

• Is the technical or IT know-how I use every day critical to my business processes and functions?
• Is this know-how not easily replaceable by an alternative or is the conversion to an alternative too costly or too lengthy?
• What if the company that developed and now maintains one of my business-critical software applications becomes insolvent, or is taken over by a competitor and changes business direction?

Frank answers could prompt you to rethink your existing unworkable escrow agreements, substantially lower your risk profiles and strengthen your good corporate governance.

Watch the eDeaf video right here: https://www.youtube.com/watch?v=MqIiTeoUgK4

eDeaf is making room for the deaf community by striving to improve their social and economic lives through a variety of empowerment and skills development programmes.

eDeaf, a skills development training provider, aims to break down the stereotype that Deaf people are different and less capable than hearing people at certain jobs. They also strive to help Deaf individuals take advantage of various employment and education opportunities that exist, as well as create further opportunities for the Deaf community to empower themselves.

Clockwork, the Johannesburg and London-based full-service agency, works closely with eDeaf to annually place deaf learners through the empowerment and employment programmes. With five learners per year sponsored by Clockwork, these students have gone on to lead successfully employed lives in the IT, retail and hygiene sectors upon completion of their skills development training.

Established in 2007, eDeaf is the leading provider of (Deaf) skills development training in South Africa. Deaf-owned and staffed, they offer partnered solution approaches to provide a holistic, end-to-end service, to both the employer and the Deaf learner/employee in terms of training, recruitment, ongoing support services as well as interpreter services. 

With five branches nationally, they are able to offer the ideal learning environment for Deaf individuals to learn South African Sign Language (SASL) in their home language, with over 100 experienced and qualified Deaf facilitators and employees.

By adding value to the individuals they train, eDeaf creates employable Deaf individuals who are able to contribute to the economy, reducing reliance on social grants and thereby boosting the overall economy. 

eDeaf specialises in working with the previously disadvantaged youth that are classified as ‘profoundly’ Deaf. This means Deaf students that have grown up in schools that have not been able to cater for their disability, as lip reading and hearing aids are not available. Any education from primary and high school to tertiary has been difficult or impossible for these individuals, which is why eDeaf is so important to their growth as valuable community members.

Break the stigma of working with the Deaf and download the Deafinition app now to learn SASL and communicate with a deaf employee. Consider hiring a Deaf graduate in your company or sponsor a learner to complete their skills development training, which results in BEE points for all companies.

Find out more about how your company can get involved at 

Insights from Aon The One Brief

With ransomware attacks filling the headlines and the COVID-19 pandemic pushing organisations to embrace remote working and online business models, cyber security has become a top-of-mind concern for many business leaders. It should come as no surprise, then, that cyber-attacks and data breaches rank first on the list of the top 10 risks in Aon’s2021 Global Risk Management Survey.

Looking across the survey, the pandemic had a clear impact on the top concerns facing the top decision-makers Aon surveyed. Perhaps unsurprisingly, pandemic risk/health crises have moved into the top 10 for the first time to seventh place, up from 60th in Aon’s last biennial survey.

Other top 10 risks reflecting the pandemic’s impact include business interruption risks, supply chain exposures and economic risks.

“The impact of the COVID-19 pandemic has demonstrated the interconnected nature of risk. Risk profiles have been and continue to be in a state of flux as businesses and economies emerge from the pandemic,” says Rory Moloney, COO of global enterprise clients at Aon. “As our survey shows, long-tail risks have become an important part of the risk landscape, with ripple effects already seen in heightened awareness of reputation and pandemic risk as well as cyber, which has magnified due to an accelerated reliance on technology, as well as impacts to global economics and trade as businesses all over the world went into unprecedented lockdowns.”

The 2021 Global Risk Management Survey drew online responses from 2,344 risk decision-makers from 16 industrial sectors, representing small, medium and large-sized companies across 60 countries. The report details the leading risks and provides guidance on addressing them.

Top 10 Risks

1. Cyber Attack/Data Breach

Respondents to our 2019 survey ranked cyber-attack/data breach in sixth place. Since then, they’ve come to see online attacks as an epidemic of their own.

Cyber criminals were quick to capitalise on the move to remote work and online business during the pandemic. For example, ransomware attacks grew dramatically, increasing 400 percent from the first quarter of 2018 to the fourth quarter of 2020, according to Aon’s 2021 Cyber Security Risk Report. The report suggests that business costs associated with ransomware attacks could reach $20 billion this year.

The spike in losses have pushed cyber insurers to increase their rates while reducing capacity. However, cyber insurance is just part of the solution to online attacks. Businesses must strive to keep pace with hackers and those initiating ransomware attacks, investing in cyber security and constantly assessing their potential exposures.

2. Business Interruption

Businesses around the world saw operations come to a screeching halt in early 2020 as governments imposed lockdowns and travel restrictions to combat the COVID-19 pandemic.

The experience — along with the increased reliance on technology and a connected world — changed the way many think about business interruption, recognising that such disruptions can be systemic and not just local events. That changed perspective drove business interruption’s jump to the second spot in this year’s ranking, up from fourth place in 2019.

As the business interruption threat evolves, organisations should strive to better understand how they might be affected by the changed threat. Then, they must build solutions to address the risk, including appropriate risk transfer and building resilience against the potential for more frequent extreme scenarios that could disrupt business.

3. Economic Slowdown/Slow Recovery

The global economy contracted 3.2 percent in 2020due to the impact of the pandemic, and while a recovery is underway, troubling signs of volatility remain. The delta variant’s recent impact on economic activity shows that uncertainties still surround the world’s economies.

Economic Slowdown/Slow Recovery was the top risk in the 2019 survey, as business leaders eyed the possibility of an impending recession.

Faced with ongoing economic uncertainty, businesses should look for ways to maintain and increase revenue, control expenses and take steps to build resilient operations and workforces. A sound enterprise risk management program can contribute to that resilience and help improve businesses’ competitiveness and agility.

4. Commodity Price Risk/Scarcity of Materials

The disruptions to manufacturing and consumer activity, along with transportation interruptions and port closures in the pandemic’s early days, led to scarcities of materials and commodities. Now, as businesses look to return to normal levels of activity, many commodity producers are unable to keep up with surging demand.

The result? Commodity Price Risk/Scarcity of Materials reached its highest level ever in our survey, up from seventh place in 2019. Meanwhile, as businesses wait for commodity supply to rebalance with demand, there is uncertainty about whether the global economy has experienced fundamental changes that will lead to permanent increases in the prices of some commodities and materials, fueling inflation.

In this risk environment, businesses will need to take such steps as implementing detailed cost tracking, examining various scenarios and taking advantage of risk analytics. Meanwhile, procurement departments should strive for agility and familiarise themselves with the full range of hedging opportunities.

5. Damage to Reputation/Brand

As the COVID-19 pandemic advanced, some observers suggested that it might offer a distraction from reputation-threatening events. A look at the negative fallout many businesses experienced in 2020 as a result of various events, mistakes and transgressions showed the reputation threat remained in full force.

Reputation and brand damage slipped a bit in this year’s ranking — down from second place in 2019 — but the threat is still significant. A joint Aon-Pentland Analytics study found that a major reputational crisis causes a company’s shareholders to lose an average of 26 percent of value at some point during the post-crisis year.

Given the impact of social media on the speed and spread of potential reputation-damaging news, businesses should identify their exposures and make addressing them part of their enterprise risk management programs. Scenario analysis and developing and testing response plans can also reduce the risk.

6. Regulatory/Legislative Changes

The global regulatory landscape for businesses grows ever more challenging. With governments around the world looking to increase their authority in such areas as public health, financial markets, climate change, taxation and technology, regulatory complexity will likely grow.

Faced with that regulatory environment, survey respondents moved regulatory and legislative changes up four spots in this year’s ranking, from 10th in 2019. As laws and regulations become both more far-reaching and detailed, the risk of non-compliance becomes more severe.

Regulatory risk should be an element of organisation’s enterprise risk management programs. Multinational organisations should develop integrated global compliance efforts that can respond quickly to the enforcement environments across various jurisdictions. And the compliance team should be involved at the product development, risk assessment and design stage to ensure compliance across various markets.

7. Pandemic Risk/Health Crises

As they continue to address the broad and numerous impacts of the COVID-19 pandemic, respondents to our 2021 survey clearly recognise the potential threat of pandemic risks and health crises. The peril made a massive leap in this year’s survey, finding a place in the top 10 after being ranked 60th in 2019.

The nature of the current crisis is testing business leaders in new ways. Both countries and businesses will be changed by this pandemic as consumer behaviours change, supply chains are reshaped, business models rewritten and expectations of governments shift.

For all organisations looking to deal with this risk, the pandemic has underscored the importance of four key components of resilience: leadership that provides a sense of reassurance and common purpose; accurate, honest and frequent communication; the use of available information to craft new business models, operating methods and communications channels, adjusting as needed; and the use of data to build agile and resilient workforces.

8. Supply Chain or Distribution Failure

Beyond the impact of the COVID-19 pandemic on supply chains, additional disruptions have resulted from climate change, natural catastrophes and even a container ship wedged in the Suez Canal. Among the results: risk decision makers moved Supply Chain or Distribution Failure into the Top 10 Risks in this year’s survey, from 12th place in 2019.

Other perils can also threaten supply chains, including cyber-attacks, political unrest, credit failure and product recalls. With consumers and governments increasing their focus on environmental, social and governance (ESG) issues, ESG risk could pose a future supply chain threat.

To lessen the impact of supply chain risks, businesses should take a holistic view of their supply chains. They should strive to understand the entire length of their supply chain and who touches what at each link on the chain. In many cases, data and sensor technology can provide insights into supply chains that were previously unavailable.

9. Increasing Competition

The risk of increased competition has long been a top 10 risk in Aon’s Global Risk Management Survey. While it slipped in this year’s ranking — down from fifth place in 2019 — that likely has more to do with respondents increasing concerns over other perils highlighted by the COVID-19 pandemic.

A number of factors can influence an organisation’s own competitive position. Its own comparative resilience, new competitors, changing consumer trends, technological advances, regulatory changes, economic trends and changing competitor strategies can all play a part.

Faced with the risk of increasing competition, organisations should identify all the factors that might result in loss of market share and take steps to address them. Having identified the areas that might affect its competitive position, a business can take steps to address those potential threats. Meanwhile, factoring those insights into the organisation’s enterprise risk management program can contribute to increased resilience.

10. Failure to Innovate/Meet Customer Needs

Innovation is critical to future business success. One silver lining of the COVID-19 pandemic has been many organisations’ successful efforts to develop new products and services to address pandemic challenges — innovations that may play an important role in their businesses going forward.

Businesses clearly recognise the threat posed by a failure to innovate or keep up with customer needs. The risk has been part of the top 10 since 2011, ranking Number 9 in 2019.

Innovation involves taking a step into the unknown. Organisations must become more comfortable with uncertainty and ambiguity, fundamental aspects of the innovation process. A lack of resilience, lagging digital capability or a failure to manage volatility can impair an organisation’s ability to innovate, underscoring the importance of effective and comprehensive enterprise risk management programs in helping organisations innovate successfully and anticipate and meet customer demand.

Succeeding in a World of Interconnected Risks

By highlighting the interconnectedness of a large number of risks, the COVID-19 pandemic has shown that preparing for each peril on its own is insufficient. In today’s global marketplace, a variety of perils can pose systemic threats and need to be assessed, managed and monitored in an integrated way at enterprise level.

Organisations that adopt that enterprise-level approach need to focus on three key priorities to support their decision making in managing risk: understanding new forms of volatility affecting their business, considering new capital alternatives that can support risk taking while preserving existing capital and building a resilient workforce and workplace in which employees are best prepared to address future challenges.

-- ENDS --

About Aon
Aon plc(NYSE: AON) is a leading global professional services firm providing a broad range of risk, retirement and health solutions. Our 50,000 colleagues in 120 countries empower results for clients by using proprietary data and analytics to deliver insights that reduce volatility and improve performance.

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In a surprise move this past week, Amazon announced that it will be dropping Visa cards as a payment option for its operations in the UK. The international eCommerce giant made it very clear that excessive card fees continued to be an obstacle for businesses striving to provide the best prices for customers. 

More importantly, it’s been a deliberate step by the online retailer to drive open banking on its platform. Going forward, bank-to-bank payments will be the primary way for people to transact on Amazon.

Thomas Pays, CEO and co-founder of Ozow, explains that Africa often follows international trends. “We’re excited about what this means for the future of eCommerce on the continent. We expect to see that many businesses in the local market will follow the move by Amazon.”

Understanding the importance of reducing barriers to access, Pays says that Ozow is already seeing its merchants prioritising alternative payment options, which are significantly cheaper and allow them to reach a wider net of consumers.

He points out that the rapid adoption of digital payment solutions is helping to create greater access to millions of bank account holders. “These are cheaper, easier to use and allow for a more seamless checkout process.”

“As they become more ubiquitous, we’re also expecting transaction volumes to increase as more people turn to them as the preferred payment method. More importantly, this is critical to ensure that a more financially inclusive environment is created in Africa,” adds Pays.

“The most effective way of reducing people’s reliance on cash in informal markets is through the development of simple, affordable, and secure alternative payment options. Doing so can help bring more the 370 million Sub-Saharan Africans into the digital economy,” says Pays.