Business interruption (BI), triggered by digitization and civil unrest, has become a growing cause of business risk in Nigeria, a survey by Allianz Global Corporate and Specialty (AGCS), has shown. The Allianz Global Corporate and Specialty (AGCS), a global corporate insurance carrier and a key business unit of Allianz Group, in its 9th Annual Survey on Top Business Risks shows that BI has moved from seventh to the third position as a source of business risk. The report said that digitalization and civil unrest is creating new causes of disruption and loss of income for businesses.
It stated: “Business interruption is third from seventh last year and is a key challenge with digitalization and civil unrest, creating new causes of disruption and loss of income. The survey incorporates the views of over 2,700 experts from over 100 countries including CEOs, risk managers, brokers and insurance experts”. The report further stated: “After seven years at the top, BI leapt from seventh to third this year and is number one in Africa and Tanzania; number two in Cameroon and South Africa and number four in Ghana”. The trend for larger and more complex BI losses continues unabated. Causes are becoming ever more diverse, ranging from fire, explosion or natural catastrophes to digital supply chains and political violence.
Businesses are also increasingly exposed to the direct or indirect impact of riots, civil unrest or terrorist attacks. The past year has seen civil unrest in Nigeria, Ethiopia, Mail, Cameroon, Niger, Sudan, Guinea, South Sudan and Somalia to name but a few with some resulting in property damage, business interruption and general loss of income for both local and multinational companies.
A breakdown of the survey showed that macroeconomic developments (36% of responses) ranked the most important business risk in Nigeria in the ninth Allianz Bank Barometer 2020, relegating changes in legislation and regulation to fifth place.