Cyberattacks overtake Covid as biggest risk to businesses


Cybercrime is one of the biggest challenges facing companies. PHOTO | FOTOSEARCH

Kenyan businesses are more concerned about disruptions due to increased cyberattacks than the Covid-19 pandemic, a new survey has shown.

The Allianz Risk Barometer 2022 report ranks the pandemic as the third issue companies are concerned about and feel adequately prepared for future outbreaks.

Globally, the Covid-19 pandemic becomes the fourth risk coming from the second position.

Business interruption is ranked second globally and in other parts of Africa including South Africa and Madagascar.

“Business interrupted’ will likely remain the key underlying risk theme in 2022,” AGCS CEO Joachim Mueller summarizes.

The survey sampled 2650 respondents in 89 countries including CEOs, risk managers, brokers and insurance experts.

According to the survey, the most feared cause of businesses interruption 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.

Ransomware was ranked the top cyber threat in 2022 by more than half of the respondents (57 percent).

“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,” added Mr Mueller.

Respondents acknowledged the need to build resilience and contingency plans for future disruptions or face the growing consequences from regulators, investors and other stakeholders.

As Kenya is going into the general election on August 9th, political risks and violence and changes in legislation and regulation are rising concerns for businesses in the country.

Furthermore, according to Human Rights Watch, political risks and violence is a new risk at number two owing to known and documented police brutality in the country.

Changes in legislation and regulation moved up from ninth place to fourth in the country.

“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.

Awareness of business interruption grew drastically in the pandemic period due to increased cyber-crimes which were ranked fifth in the country.

Fifty per cent of respondents are most concerned about climate-change-related weather events causing damage to corporate property while 36 per cent are worried about managing the transition of their businesses to a low-carbon economy.

As the world moves towards taking climate change action by reducing carbon emissions mainly from companies, 34 percent are concerned with avoiding potential litigation risks for not adequately taking action to address climate change.

“Building resilience against the many causes of business interruption is increasingly becoming a competitive advantage for companies,” said Mr Mueller.

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