Malaysian businesses most concerned about interruption from increased storms and floods: Allianz

The Allianz Risk Barometer 2024 revealed that risks of cyber attacks, natural calamities, and fires are the top concerns of Malaysian businesses.

Malaysia’s large corporates, mid-size, and smaller businesses shared that business interruption, fire & explosion, and natural catastrophes are the top concerns for businesses, according to the Allianz Risk Barometer for 2024. 

Notably, changes in legislation and regulation, including tariffs and economic sanctions, and cyber incidents such as ransomware attacks and data breaches rank as the fourth major worry.

“Business interruption is closely linked to many of this year’s highly ranked risks, such as cyber, natural catastrophes, and fire, and remains a key concern in a rapidly changing world,” commented Rafliz Ridzuan, chief underwriting officer at Allianz General Insurance Company (Malaysia) Berhad.

Globally and in Asia, cyber incidents, business interruption, and natural catastrophes are identified as the top three risks. In Asia, additional concerns include fire and explosion, which has risen in ranking, and climate change, maintaining its position at fifth place.

However, a widening resilience gap is observed, with larger organizations increasing risk awareness post-pandemic and actively enhancing resilience. Smaller businesses face challenges in identifying and preparing for a range of risk scenarios, resulting in longer recovery times after unexpected incidents.

In Asia, cyber incidents (36%), business interruption (35%), and natural catastrophes (31%) are identified as the top three risks. Malaysia, specifically, highlights business interruption as a key concern, closely linked to cyber threats, natural catastrophes, and fire incidents. 

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Coastal flooding and flash floods in the country, exacerbated by global warming, contribute to the rising risk landscape.

The report also mentions notable fires in Malaysia, including one at Mid Valley Megamall in Kuala Lumpur and two at a textile store in Shah Alam, emphasising the need for robust risk management plans and supply chains to enhance resilience against business interruption.

“Disruption from fire can be very high, as it can take longer to recover from than many other perils, and the impact on suppliers can often be great. For sectors which deal with highly flammable and explosive materials, damaged facilities can sometimes take years to rebuild and get production back up and running to full capacity,” Ridzuan said.

Additionally, Malaysia's susceptibility to flooding paints an alarming picture, with climate change projections indicating a 20% increase in floods over the next five years. 

The country's recent fire incidents and the challenges posed by unauthorised recycling facilities further emphasise the importance of proactive risk management strategies.

 It is crucial that companies have robust risk management plans and supply chains in place to enhance resilience and withstand business interruption.” added.