One of the big lessons learned from the pandemic is that extreme business interruption events are not just theoretical, but a real possibility. The 10th Allianz Risk Barometer 2021 identified a trio of Covid-19 related risks, including Business interruption, Pandemic outbreak, and Cyber incidents as the top three global business risks this year.
Business risk is any exposure an organization has to factor that may lower its profits. The 10 Business Risks of 2021 identified by Allianz, based on over 2,700 risk management experts globally, are:
#1 Business interruption
#2 Pandemic outbreak
#3 Cyber incidents
#4 Market developments
#5 Changes in legislation
#6 Natural catastrophes
#7 Fire, explosion
#8 Macroeconomic developments
#9 Climate change / Increasing volatility of weather
#10 Political risks and violence
Dealing with Business Risks
- Identify: The first step for dealing with risk is to identify it in the business plan.
- Prioritize: A risk management strategy prioritizes risks according to their probability.
- Involve employees: Identifying risks is not sole responsibility of managers.
- Learn for the future: Document everything in case the same situation arises again.
- Always have in mind: Business risk cannot be entirely avoided as it is unpredictable!
5 pandemic changes that will most impact businesses in 2021
- Acceleration towards greater digitalization,
- More remote working,
- Growth in the number of insolvencies,
- Restrictions on travel/ less business travel and
- Increasing cyber risk.
Remember, building greater resilience in supply chains and business models will be critical for managing future exposures!
