Cyber incidents are the top risk for South African businesses in 2022

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Corporate insurance multinational Allianz Global Corporate & Specialty’s (AGCS’s) annual survey - Allianz Risk Barometer 2022 - looks at the key business risks for the next 12 months and beyond, based on the views of 2,650 risk management experts from 89 countries and territories, including brokers, insurance experts, risk managers and CEOs.

The top 3 business risks in South Africa in 2022 are cyber incidents (for example, cyber-crime, IT failure/ outage, data breaches, fines, and penalties) business interruption (including supply chain disruption), and critical infrastructure blackouts (for example power disruption) or failures (for example, aging dams, bridges, or rail tracks).

However, our country is not alone in this worry (for once), as cyber risks are also the biggest concern for companies globally. The key driver of cyber risks is the latest rise in ransomware attacks, where victims accidentally download malware through links or email attachments from ‘unknown sources’ – who happen to be hackers. These hackers then gain access to your device, and then lock and encrypt the data stored on it.

AGCS CEO Joachim Mueller comments: “Business interruption will likely remain the key underlying risk theme in 2022. For most companies the biggest fear is not being able to produce their products or deliver their services. 2021 saw unprecedented levels of disruption, caused by various triggers. Crippling cyberattacks, the supply chain impact from many climate change-related weather events, as well as pandemic-related manufacturing problems and transport bottlenecks wreaked havoc.”
This year only promises a gradual easing of the situation, although further Covid-19-related problems cannot be ruled out. Building resilience against the many causes of business interruption is increasingly becoming a competitive advantage for companies.

– AGCS CEO, Joachim Mueller

AGCS’s CEO in South Africa, Thusang Mahlangu, comments: “Preparation is key – in particular for exposed sectors such as retail.”

As companies’ have shifted to remote working, and their reliance on digitalisation has grown, their modern supply chains and production networks are more vulnerable than ever to cyber risks. This is why, in the cybersecurity world, there’s a (possibly over-used) but very true saying: “It’s not a question of if but when.” 

Cybercriminals look for victims who do not take their cybersecurity seriously, so the importance of having an effective cyber incident response strategy is paramount. A phenomenal tool to have in your solution kit is cyber insurance, because it is the only answer to financial recovery after a breach.

The large, upfront, annual premium payment for this line of coverage often isn’t accessible for many, and results in businesses choosing not to take out this critical insurance coverage, which can be an extremely costly mistake.  Our premium financing solution allows businesses to pay off their insurance premiums monthly (instead of one annual lump sum payment), while freeing up the cash flow to reinvest in your company or in the market (along with many other benefits for businesses, brokers, and insurers).
Although there have been endless risks for businesses, opportunities have also presented themselves among the cracks. One such opportunity is to partner with a premium finance provider. You can contact us here – we’re the largest provider of premium finance facilities in the South African marketplace.

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