Business Interruption still the number one risk facing risk managers.
Allianz Global Corporate and Specialty (AGCS) published its Allianz Risk Barometer for 2016. Businesses supply chain interruption remains the top risk for businesses globally. This has been the fourth year that business interruption has filled this position.
What is of interest is that business interruption is not being considered solely caused by physical loss or damage to property but also driven by cyber attacks, technical failure and geopolitical instability.
We at LMI have seen a number of business interruption losses resulting from prevention of access during the bush fires in several Australian states.
Also of concern to risk managers are changes in marketing, market conditions and cyber incidents.
Natural catastrophe has dropped two positions to number 4. This reflects the fact that globally, natural disasters reached their lowest level since 2009, although Australia did suffer more than its fair share with the Insurance Council of Australia classifying six events as catastrophe events.
Despite business interruption being such an important class of insurance protection, we find that far too many businesses do not have any business interruption insurance and while many that do, are under insured sometimes grossly.
I conclude by explaining that the AGCS survey is carried out with over 800 risk managers and insurance experts from more than 40 countries taking part.