Whether it is a major earthquake that affects Southeast Asia or the British imminent exodus from the European Union, companies around the world must be wary of any threats that may interfere with their activities.
"In today's interconnected world, no company is truly isolated from what's happening in other parts of the world," said Barry Franklin (photo), head of risk for Zurich North America. In particular, Zurich Insurance Group and Marsh & McLennan Companies were strategic partners in producing the WEF report. "You may think you are, but your suppliers probably have a number of connections or dependencies on supply chains in other parts of the world, and because we are so interconnected, no company can go ahead and assume that these things they will not affect them in other parts of the world. "
In view of the weather conditions in 2017 and 2018, it is logical that natural disasters are top of mind for respondents of the WEF & # 39; s Global Risks Perception Survey, the results of this supported this year's report on global risk & # 39; s.
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"You are becoming increasingly famous in cat sensitive areas, so I think exposure to losses from these events will naturally increase," Franklin said, adding that events such as the recent partial elimination of the government in both the US and the US Brexit show the impact of geopolitical developments. "Any change that has the potential to disrupt international trade may affect companies in terms of business activity."
The theme of interconnectivity and business implications was hard to miss in the WEF report, which included a map showing how any significant global development, from the changing climate and rising income and capital differences, to an aging population and increasing urbanization, connected with a litany of related risks. Increasing cyber dependency has to do with cyber attacks, data fraud or theft, critical infrastructure infrastructure failure and, more generally, the adverse effects of technological progress.
Indeed, increased cyber and technological threats have been identified as an important potential blind spot in the report because we have not yet fully understood the vulnerability of networked societies.
"It goes without saying that we will see an increasing frequency and potential, severity of cyber-related events, both deliberately caused by bad actors and by accidental events, [such as] unintentional release of data and information, "says Franklin." The increasing interconnectedness, the dependence on the internet of things [and] connected devices, these are all good things. We have the ability to better monitor machines, equipment and water systems to identify possible leaks and mechanical defects much earlier, but these devices must be connected to them and it increases the vulnerability to external actors. "
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At the same time people become more dependent on technology and digitization, the cyber threat environment is constantly reorganizing itself. Although companies can continue to try to implement stronger cyber security protocols and top-shelf solutions, the threat environment will also respond.
"It is a constant battle to keep up with the sophistication and resources of those who want to benefit from technical and technological vulnerability," Franklin added.
Nevertheless, many administrations and executives pay attention to the risks associated with cyber – not only do they talk more often about this threat, but they also do more internally to better prepare themselves for the possibility of a cyber incident, according to the Zurich expert. The problem is that companies that have not taken this threat seriously and still think they do not have the same exposure, making them less diligent about risk reduction.
When it comes to extreme weather conditions, there is little that an individual company can do to slow the effects of climate change or to prevent natural disasters, but their executives can at least be ready to handle the effects of extreme weather conditions, of resilient designs. supply chains to determine where facilities are located and how many insurance policies they buy at the start.
"There is no solution for silver solvents that is a comprehensive approach to risk management, and that general theme also applies to technology and cyber risk," Franklin explains. "[Companies] must do everything they can to protect themselves, both in terms of technological solutions and the protections they implement, and train and train their people and ensure that they do not create unnecessary exposure. "