Cyber attacks top risks for UK firms in 2024 but spectre of natural disasters looms large
Cyber and business interruption (BI) are top risks for UK businesses over 2024, but Britain has some different views on major risks compared to to its global peers.
The Allianz Risk Barometer has ranked cyber incidents as the biggest risk for businesses, both globally and in the UK, by companies of all sizes and over a range of sectors.
The report noted that hackers are beginning to use AI-powered language for their ransomware attacks, as well as using it to create malware and produce highly convincing phishing emails and deep fakes. The report suggested that these attacks are likely to proliferate during this year.
Cyber incidents also ranked first place in last year’s Barometer report on global risks. However, first time, this year its first place is by a clear margin.
From this, the exposure most respondents are concerned with is a data breach, which is followed by cyber-attacks on critical infrastructure and physical assets and an increase in ransomware attacks.
Last year there were several noteworthy companies that faced cyber attacks including electronic manufacturer Volex, magic circle law firm Allen & Overy, and payroll provider Zellis.
BI followed in second place as the major business risk for 2024 globally, as well as the UK – similar position as last year. BI is closely related and linked in many ways to the other top global risks, such as cyber risk, climate change, political risks and violence, energy crisis and more.
While natural catastrophes came in third place, over the year it has moved up three places as it was the sixth place concern for business in 2023.
Munich Re’s latest report highlighted that natural disasters in 2023 resulted in $250bn in losses, with insured losses of $95bn (£74.6bn), and caused more than 74,000 fatalities.
In the UK, there was also a sharp drop in macroeconomic concerns, which fell by almost half from 34 per cent to 18 per cent (globally it fell by 19 per cent).
The rise of concerns for businesses in the UK was the shortage of skilled workers, as it was the fourth most significant risk for all businesses (globally tenth place). Back in December, it was reported that London continued to see the fewest apprenticeship starts by the population of any region in the UK, amid warnings of a “recruitment crisis” facing the city.
Uniquely important in the UK for businesses was political risks, as it was a concern for 19 per cent of respondents compared to 14 per cent globally. The UK government must hold a general election before January 2025 at the very latest, there is speculation on when the Prime Minister will call for it, with November being a popular opinion.
Commenting on the report, Allianz Commercial managing director for the UK, Nadia Côté said: “The UK takes a different view on major risks to its global peers. While cyber is still the leading risk, concern about this and also about macroeconomic conditions have fallen over the last year. Instead, an aligned group of other issues have risen to the forefront for business leaders.”
“Shortage of skilled workers and the rising risk from new technologies such as AI bring together an increasing concern about a changing workplace and risks that group together in the D&O arena. Meanwhile, while the UK economy has stabilised, the political environment, coming into a UK election year with a change of government widely expected, is unsurprisingly a worry for business leaders,” she added.