In 2024, South Africa’s businesses grapple with a formidable risk – critical infrastructure blackouts – as per the Allianz Risk Barometer. This peril maintains its top-ranking position for the second consecutive year, drawing insights from 3,000 risk management professionals. The report underscores the severe impact of power outages and infrastructure breakdowns on the country’s economy and businesses.
These blackouts not only disrupt supply chains but also have broader implications for the overall economy. Failures in essential infrastructure, such as ports, railways, and roads, present substantial challenges for businesses. Consequently, companies are directing investments towards bolstering infrastructure resilience and formulating contingency plans to alleviate potential repercussions. Thusang Mahlangu, CEO of Allianz Commercial South Africa, emphasizes the urgency for businesses to remain vigilant against critical infrastructure blackouts. Mahlangu underscores the proactive approach required to address these risks, enhancing the ability to withstand disruptions and ensuring uninterrupted operations. Globally, cyber incidents are the foremost concern for businesses in 2024, marking the third consecutive year that cyber threats, including ransomware attacks and data breaches, have ranked as the most critical risk. The report also sheds light on the use of emerging technologies like generative artificial intelligence to automate and expedite cyber-attacks. Business interruption retains its position as the second most significant threat in the 2024 survey, highlighting the interconnectedness and dependence on supply chains for critical products and services. Enhancing business continuity management and identifying supply chain bottlenecks emerge as key priorities for risk management. Natural catastrophes have ascended to become the third major global risk, with extreme weather events causing substantial damage to South African homes, businesses, and critical infrastructure in the previous year.
The Allianz Risk Barometer reveals regional variations in risk perception. In South Africa, there has been a slight shift in climate change risk perception, dropping from fourth to seventh place in 2023. Nevertheless, the physical damage from more frequent and severe weather events remains a significant threat to corporate assets.
Globally, political risks and violence have risen to the eighth spot, reflecting ongoing conflicts and tensions between countries. This trend is expected to fuel social unrest due to dissatisfaction with potential outcomes, economic uncertainty, and the spread of disinformation through social media. Despite subdued economic growth outlooks, there is hope for stabilization in 2024 following the unpredictable economic fluctuations experienced since the COVID-19 shock. Macroeconomic development has fallen to the fifth spot in the Allianz Risk Barometer, reflecting lackluster growth. However, the risk of upheavals persists due to the considerable number of elections scheduled for 2024. Finally, while the shortage of skilled workforce is considered a lower risk in 2024 compared to the previous year, businesses in various regions still identify it as a top concern. The fight against cyber-crime is particularly impacted by the challenge of finding IT or data experts. In conclusion, the Allianz Risk Barometer for 2024 underscores the imperative for businesses to address critical infrastructure blackouts, cyber incidents, and business interruption to ensure the continuity of operations. Climate change, political risks, economic uncertainties, and the shortage of skilled workforces also contribute to business risks, emphasizing the importance of prioritizing risk management and resilience strategies.
