Corporate risks shift to reflect the times; identifying these risks can help businesses to manage them.

Chris Fischer Hirs, CEO of Allianz Global Corporate & Specialty (AGCS), the insurer for corporate and special risks of Allianz, says, “The growing interdependency of many industries and processes means businesses are now exposed to an increasing number of disruptive scenarios. Negative effects can quickly multiply. One risk can lead to several others. Natural catastrophes or cyber-attacks can cause business interruption not only for one company, but to whole sectors or critical infrastructure. Risk management must reflect this new reality. Identifying the impact of any interconnectivity early can mitigate or help prevent losses occurring. It is also essential to foster cross-functional collaboration within companies to tackle modern risks.”

The Allianz Risk Barometer 2015 compiles the results of a survey taken by over 500 risk managers and corporate insurance experts from both Allianz and global businesses across 47 countries. In addition to traditional risks such as natural catastrophes and supply chain risk, the barometer reports a rising threat from cyber-crime and political risk.

The cyber-crime, IT failures, espionage and data breaches category has risen into the global top five for the first time, and ranks among the top three in the UK, Germany and the US. As in the case of Sony, a cyber-attack can lead to loss of reputation and brand damage. Awareness of the problem has increased but an understanding of how to properly defend a business from such attacks is still limited.

Jens Krickhahn, practice leader cyber and fidelity at AGCS Financial Lines, says, “Cyber risks are very complex. Different stakeholders such as IT security architects and business continuity managers need to share their knowledge to identify and evaluate threat scenarios. Previously siloed knowledge needs to be incorporated in one think tank which can look at risks holistically. The human factor should also not be underestimated, as employees can cause IT security incidents, inadvertently and deliberately.”

Political and social upheaval has become a particular business concern for respondents in Ukraine, Russia and Switzerland, and also in Brazil and EMEA. After natural catastrophes, political upheaval is the top cause of supply chain disruption. Christof Bentele, head of crisis management at AGCS, says that combating political risks and terrorism are identified as top business risk management challenges over the next five years.