Top Business Risks for Australian Businesses in 2024
The top risks in this year's Allianz Risk Barometer report reflect the significant issues facing businesses right now, with cyber incidents, natural catastrophes, and the shortage of skilled labour of particular concern to Australian survey respondents.
Top 3 Risks for 2024
- Cyber Incidents
Cyber risk has jumped from 4th to 1st place compared to 2023, reflecting Australia's growing number of high-profile cyberattacks. The ranking also comes as no surprise as cybercriminals begin to take advantage of AI-powered language models to accelerate the speed and scope of ransomware attacks and persuasive phishing emails.
As businesses and the wider economy continue to increase their reliance on digital services and infrastructure, ensuring your business invests in appropriate cybersecurity measures to help protect against cyber incidents is more critical than ever. - Natural Catastrophes
During Australia's 2022-23 catastrophe season, insured losses amounted to $1.6 billion. Although significantly lower than the previous 12 months, devastating floods, severe storms and tropical cyclones were enough to see Natural Catastrophes jump to second place. This makes natural catastrophes one of the biggest movers globally in this year's survey. - Shortage of Skilled Workforce
The shortage of skilled labour has emerged as a significant risk concern for Australian businesses. With the evolving economic landscape and technological advancements, there is a growing demand for specialised skills across various industries. However, the availability of skilled workers fails to meet this demand, posing challenges for businesses in recruitment, retention, and talent development. This shortage also has an effect on productivity and innovation, increases labour costs, and creates competitive pressures.
To help combat these risks, businesses could consider upskilling existing employees, exploring alternative talent sources and tapping into diverse talent pools.
Other Risk Considerations
While 2023 saw some easing of post-pandemic supply chain disruptions and companies invested in risk management strategies, business interruption still ranks as the second biggest threat for businesses globally in the 2024 survey. This highlights the interconnectedness of the modern landscape and the constant risk of disruptions. Cyber incidents and natural catastrophes remain the top two causes of business interruption feared most by businesses.
Climate change is also still a key concern for businesses globally. Extreme weather events, such as floods, storms, and fires, can pose significant risks of property damage and business interruption. Many businesses are also considering a shift to low-carbon business models, improving planning and response to climate events and implementing physical measures to boost resilience.
How Coverforce can help
The year ahead will likely present challenges and opportunities for Australian businesses. Understanding your key vulnerabilities and securing appropriate insurance coverage can help mitigate your risks and help your business better navigate these challenges with greater confidence.
Our team of experienced insurance brokers are here to provide personalised risk advice and highly competitive insurance solutions tailored to your business needs and budget. Contact your local Coverforce Office and see how we can help your business.
The information provided in this article is of a general nature only and has been prepared without taking into account your individual objectives, financial situation or needs. If you require advice that is tailored to your specific business or individual circumstances, please contact Coverforce directly.
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