For the third year in a row, business interruption was ranked as the top business risk for Chinese companies in the 2020 Allianz Risk Barometer. Natural catastrophes ranked second, while cyber incidents and market developments were tied in third place.
According to the report, business interruption (BI) was identified by 30% of respondents, while natural catastrophe was pinpointed by 26%. The two third-place risks each got 24%.
The ninth edition of the annual survey on global business risks from Allianz Global Corporate & Specialty (AGCS) interviewed a record 2,718 experts in over 100 countries, including CEOs, risk managers, brokers, and insurance experts.
While business interruption dropped to second place globally after seven years, it remained at the top in China, reflecting the continuing trend for larger and more complex BI losses in the country. Causes are becoming ever more diverse, the report said, ranging from fire and explosion to natural catastrophes and political violence.
The report pinpointed the escalating civil unrest in Hong Kong, which has resulted in property damage, BI and general loss of income for both local and multinational companies. Businesses were forced to close, tourist arrivals dropped, and employees couldn’t access their workplace due to safety concerns. These resulted in business interruptions with few physical losses but high financial burdens.
While typhoons in Asia and wildfires in Australia made headlines globally, the report revealed that economic losses from natural catastrophe events actually declined 20% year-on-year to around US$133 billion.
In recent years, significant non-weather-related nat cat events, such as earthquakes or tsunamis, have been rare and, consequently, the importance of these risks has declined in the Allianz Risk Barometer.
“Nevertheless, nat cat risks are in the top three risks in many regions across the globe that are frequently affected by meteorological, geophysical, climatological and hydrological events including China, the US and Japan,” said Patrick Zeng, CEO Hong Kong & Greater China.
