The best software for quality and risk management.Are you curious to know what risks your organisation could face in 2024? Every year, various research firms come up with a top 10 risks for organisations. We are happy to take a closer look at them for you, so you know what to prepare for! The top 10 risks come from the Allianz Risk Barometer. They identified the most important risks for 2024. For this, they compiled the findings of more than 3,000 risk management experts from 92 countries and 24 sectors. Read below which challenges will play a major role in business in the coming period.
For the first time, cyber incidents are the biggest global risk in the Allianz Risk Barometer. Compared to 2023, this risk has risen in the ranking. Out of all those surveyed, 36% said they considered this the biggest risk. That is five percentage points more than business interruption, the risk ranked number two. This risk applies to both larger and smaller organisations worldwide.
Not surprisingly, cyber incidents are worrisome for many organisations. Cybercriminals are in fact getting smarter and finding new ways to carry out cyber attacks as technology continues to improve. Deep fakes, convincing phishing emails and new malware: these are attacks we can expect more than ever this year. There are a number of ways to prepare your organisation for more cyber attacks. For instance, you can use a good document management system to store information securely and create more awareness among employees .
Since 2023, the supply chain has been less disrupted. This is due to the end of the pandemic. Companies have also taken risk management measures since the pandemic. Despite this, business damage from business process interruption remains the second biggest threat in the Allianz Risk Barometer.
Business losses are closely linked to risks we see in the top ten this year, such as cyber incidents and natural disasters. It is therefore important for your organisation to take measures that protect day-to-day processes. Think of measures to strengthen the supply chain and increase information security.
Devastating earthquakes, violent floods and a record number of wildfires: one of the biggest risers this year is natural disasters. Compared to 2023, this risk has risen three places in ranking. Natural disasters have serious consequences for people, the environment and the economy. The average economic damage in the past five years was $32 billion. This will rise to as much as $60 billion by 2023.
Organisations see natural disasters as the second largest cause of business losses. To cope with disasters as much as possible, organisations face several challenges. These include taking measures to make sites more resilient to extreme weather conditions, such as flooding.
In the Netherlands, the expected impacts of climate change on business are limited, according to a study by the European Investment Bank (EIB). In the Netherlands, 13 per cent of organisations expect climate change to have a major impact on operations. 31 per cent expect some impact. Compared to the rest of the EU, this number is higher at 23 and 35 per cent respectively.
Despite promises to cut red tape for organisations, they will still have to deal with new rules and laws in 2024 which involve a lot of red tape. These laws can also impose restrictions on an organisation’s activities. For this reason, changes in laws and regulations rose to fourth place in the ranking.
These factors create more laws and regulations for organisations to comply with:
It entails a lot of work to comply with all the reporting requirements, and for some small companies this can even be an impossible task. Would you like to be and stay compliant with all the new laws and regulations? Our quality and risk management software can help you do this.
Despite the uncertain global economic outlook and high interest rates, macroeconomics, which ranked number three last year, drops to number five in 2024. By COVID-19, we experienced huge economic swings. The hope is that these will settle down by 2024. The record number of elections may throw a spanner in the works here, though, as organisations may experience more turmoil.
Protectionism may then occur, which is unfavourable to international trade. This risk is also reflected in market developments. It is important to keep an overview of macroeconomic developments relevant to your organisation. That way, you know what to expect and can set precautions.
In 2023, fire danger ranked ninth and in 2024 it has risen to sixth. Damage from fire can often be enormous, because organisations need to recover from this for longer and the impact on the supply chain can be big. For the pharmaceutical and chemical industries, among others, which deal with highly flammable and explosive materials, it can sometimes take years to rebuild damaged facilities and restore production to full capacity. As a result, they suffer huge losses.
An Allianz Commercial analysis of more than 1,000 business claims over the past five years, worth more than $1.3 billion, shows that fire is the most common cause of these claims. This risk takes second place in terms of damage value. To prevent damage within your organisation due to tyre as much as possible, it is important toidentify fire hazard risks and take measures. This is where sound risk management can play an important role.
Climate change has been stable at spot seven for several years. The rise in natural disaster risk, however, shows that this risk matters to companies. For large companies, this risk is a high priority and in some countries climate change is even the biggest risk.
The effects of climate change are also becoming increasingly visible. Several records were broken in 2023, for instance:
For your organisation, this could mean, for example, that you must take measures to make buildings resistant to more severe weather conditions. Climate change is also increasing reporting requirements and you need to be compliant with more and more requirements.
Political risk and violence moved up from 10th in 2023 to eighth in 2024. Global politics remain volatile, whichposes risks to supply chain and international tradeentails. Current political risks are:
Depending on your organisation’s sector, problems may arise in the supply chain. Think of longer delivery times or the loss of certain suppliers. Did you know that Zenya allows you to track and audit suppliers? For example, you can check whether they comply with applicable laws and regulations, such as the NIS2.
You can read more about auditing and managing your suppliers in this article.
There are several market developments that cause this risk to rise from spot 11 in 2023 to spot nine in 2024. First, there are more protectionism. Comprehensive globalisation has come to an end. As a result, organisations mainly favour their own industry and foreign competitors are countered. To ensure national security, a network of investment restrictions and sanctions. As a result, organisations have limited access to new markets, ideas and employees.
Second, there has been an end of cheap labour. Globalisation meant that organisations had access to many factors of production, including labour in particular. Demographic changes have changed this. There is a shortage of skilled labour in various sectors, fuelling the battle for talent.
Finally, there is much uncertainty about the impact of artificial intelligence (AI) on every sector. With AI, many risks have emerged for organisations, such as more cyber attacks. It is also unclear what the impact on society and the economy will be. These market developments pose a risk for companies, Ludovic Surban also sees.
The three factors (more protectionism, the end of cheap labour and uncertainty due to the advent of AI) have a simple message for the majority of SMEs: market challenges will increase in the new era. Concerns are not misplaced.’
The risk staff shortage dropped from spot eight in 2023 to spot 10 in 2024. This risk is linked to the impact of COVID-19, and we see that many of these risks have dropped in this year’s rankings. In many sectors worldwide, however, there is still a shortage of skilled labour. The severity of this risk varies by country. For example, labour shortages rank 10th in the Americas, eighth in Europe and top four in Australia, Germany, Switzerland and the UK.
Do you notice that your organisation is struggling to recruit new employees? Staff shortages can sometimes bring business processes to a complete standstill, which can lead to major losses. This is therefore definitely a risk to keep an eye on within your organisation.
Staff shortages, natural disasters and legislative and regulatory changes: these are just some of the risks organisations will face in 2024. Unfortunately, not all risks can be avoided, but you can do something to deal with these potential dangers to your organisation.
If you want to best prepare your organisation for the year ahead, risk management is necessary. Identify risks, report incidents and implement improvement measures. Risk management software helps you do this. Want to know how Zenya can help your organisation cope with the top 10 risks of 2024? Then read how to implement risk management in six steps or contact us. We would be happy to discuss our software with you.
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