Pandemic outbreak (#1 with 36% responses) rises six spots to be the top business risk in China, the epicentre of COVID-19, in the 10th Allianz Risk Barometer 2021 released this month.
Business interruption drops one position (#2 with 33% responses), reflecting the potential disruption and loss scenarios companies are facing in the wake of the COVID-19 pandemic. Changes in legislation and regulation jumps seven positions to tie with business interruption (#3 with 33% responses).
The annual survey on global business risks from Allianz Global Corporate & Specialty (AGCS) incorporates the views of 2,769 experts in 92 countries and territories, including CEOs, risk managers, brokers and insurance experts.
In response to heightened BI vulnerabilities, many companies are aiming to build more resilient operations and to de-risk their supply chains. According to Allianz Risk Barometer respondents, improving business continuity management is the main action companies are taking (62%), followed by developing alternative or multiple suppliers (45%), investing in digital supply chains (32%) and improved supplier selection and auditing (31%). According to AGCS experts, many companies found their plans where quickly overwhelmed by the pace of the pandemic.
Business continuity planning needs to become more holistic, cross-functional, and dynamic, monitor and measure emerging or extreme loss scenarios, be constantly updated and tested and embedded into an organization’s strategy.
Mr Patrick Zeng, CEO of Hong Kong & Greater China and regional director of distribution for AGCS said: “The silver lining to the pandemic and the economic challenges that follow is that it will likely spark a period of innovation and market disruption. We anticipate the accelerating adoption of technology, hastening the demise of incumbents and traditional sectors, giving rise and opportunities to new companies and the way business is done.”