Fidelity bank banner Bayelsa State banner
Allianz Risk Barometer identifies biggest threats facing Nigerian businesses

By News Express on 25/01/2018

Share on facebook Yahoo mail icon Gmail icon Share on Google+

Views: 735

•AGCS Africa CEO Thusang Mahlangu
•AGCS Africa CEO Thusang Mahlangu

The Allianz Risk Barometer 2018 report reveals theft, fraud and corruption as the top risk in Nigeria with 38% of responses, up from #4 in 2017. Market developments remains unchanged at #2 at 36% of responses and changes in legislation & regulation also remains unmoved at #3 with 33% of responses. Fire, explosion and power blackouts (both #7 with 16% of responses) emerged as two new risks in the top 10.

Cyber incidents remains at #5 at 29%, political risks and violence is unmoved at #6 with 24%, macroeconomic developments is #4 at 31% of responses down from #1 in 2017, business interruption moves down slightly from #8 to #9 with 16% responses and new technologies maintains the 10th position at 11%. The report is published annually by Allianz Global Corporate & Specialty (AGCS), and is based on the insight of a record 1,911 risk experts from 80 countries.

The most recent studies show that corruption is a significant obstacle to business in Nigeria. Companies are very likely to encounter bribery and other corrupt practices. Corruption also features as a top 10 risk in West African countries, Togo and Ivory Coast, which participated in the survey for the first time. To provide financial protection for managers against the consequences of actual or alleged “wrongful acts” when acting in the scope of their managerial duties, companies may consider taking up Director & Officers (D&O) insurance. The D&O policy will pay for defense costs and financial losses. In addition, extensions to many D&O policies also cover costs for managers generated by administrative and criminal proceedings or in the course of investigations by regulators or criminal prosecutors.

The market and economic conditions are improving. “Recently, Nigeria resolved a six-quarter recession and an exchange rate crisis. A better business environment, as well as the recovery of oil prices should help accelerate growth in 2018 to over 2.5% from 0.8% in 2017. However, the inflation persistence to around 12.9% in 2018 may well trigger another depreciation pressure on the Naira,” says Stéphane Colliac, Senior Economist from AGCS sister company, Euler Hermes.

Businesses’ perception of the threat posed by political risks and violence remains relatively unchanged year-on-year. However, respondents are more worried about terrorism. Businesses do not have to be the direct victim to feel the effects. If an attack occurs nearby, the surrounding area may be closed, impacting operations. Globally, a general trend of increased political activism can be anticipated, causing further disruption.

Business interruption (BI) can have a tremendous effect on a company’s revenues. Yet its impact is one of the hardest risks to measure. “No business is too small to be impacted,” says AGCS Africa CEO Thusang Mahlangu, “A severe interruption can even have a terminal impact, particularly for smaller companies. But as many businesses transition from being rich in physical assets to deriving more value from intangibles and services, increasingly, BI is being triggered by non-traditional risk exposures which don’t cause physical damage but result in lost income – so-called nondamage business interruption (NDBI).”

Fire, explosion, which is a major source of BI, is a serious concern for Nigerian businesses, especially considering the many incidents that occurred in 2017. As one of the world’s largest oil and gas producers, the country is highly susceptible to accidental fires that may interrupt power supplies. It is a known fact that power blackouts are prominent in the region. In fact, in a recent outage across the country, the ministry of power blamed it on a fire at a gas pipeline system that interrupted gas supply and affected the national transmission grid. Local businesses should ensure they have a sufficient backup or risk management plan for the production halt.

Cyber incidents through events such as WannaCry and Petya ransomware attacks brought significant financial losses to a large number of businesses. Cyber threats also vary according to company size or industry. “Small companies are likely to be crippled if hit with a ransomware attack, while larger firms are targets of a greater range of threats, such as the DDoS attacks which can overwhelm systems,” says AGCS Cyber Insurance Expert Nobuhle Nkosi.

New technologies rank as the second top risk for the long-term future after cyber incidents globally, with which it is closely interlinked. Vulnerability of automated or even autonomous or self-learning machines to failure or malicious cyber acts, such as extortion or espionage, will increase in future and could have a significant impact if critical infrastructure, such as IT networks or power supply, are involved.

“Although there may be fewer smaller losses due to automation and monitoring minimising the human error factor, this may be replaced by the potential for large-scale losses, once an incident happens,” explains Michael Bruch, Head of Emerging Trends, AGCS. “Businesses also have to prepare for new risks and liabilities as responsibilities shift from human to machine, and therefore to the manufacturer or software supplier. Assignment and coverage of liability will become much more challenging in future.”

Source News Express

Posted 25/01/2018 12:09:14 PM

 

Share on facebook Yahoo mail icon Gmail icon Share on Google+


 

CLASSIFIED ADS

 

You may also like...
52 villages under herdsmen’s control — Reps

Police warns transport unions, tax officials against mounting...

Runaway London killer nabbed in Nigeria

Expect cloudy skies, thundery activities for Sunday -...

Transporters, corps members abandon INEC duties in Idemili...

Prophet predicts second civil war in Nigeria •Also...

A response, and questions, for Emir Sanusi, By...

3-year-old girl stabbed at US birthday party dies...

How Nigeria Can Become a Developed Nation: The...

REVEALED: How controversial ex-Pension boss Maina swindled Abacha...

Double Salaries: Group petitions UNIOSUN Management, Police

Judicial Corruption: Sack Amaechi, Onu now, rights group...

 

Latest News Obadara declares intention to run for senate F5 reports rising multi-cloud adoption At last, science prevailed, By Edel-Quinn Agbaegbu The subversion of NYSC Scheme Quickfire double gives Atletico extra-time victory over Real Madrid in European Super Cup Shakeup in the Navy •Full list of new officers 2019: I may join presidential race — Saraki 24 escape death as fire guts vehicles on Third Mainland Bridge Impeachment: PDP keeps vigil at NASS over Saraki Lagos police boss sacks 8 officers, demotes 6 Umahi reshuffles cabinet Airport Commissioning: Bayelsa Govt. shuts state TV station

 

Most Read NUDE PHOTO OF OMOTOLA JALADE-EKEINDE surfaces online (377,284 views) Nigerian female sex addict opens up, says ‘I like it with both men and women’ (366,392 views) Shameless Genevieve Nnaji exposes breasts in public (296,072 views) Finally named: The full list of friends of Nigerian female sex addict who prowled Facebook (241,695 views) OLUMBA OLUMBA OBU (the one who called himself God) IS DEAD (222,405 views) Igbo scholar disgraces Femi Fani-Kayode •Demolishes claims on Igbo/Yoruba history with facts and figures (216,997 views) Breaking News: POPULAR REVEREND CONVERTS TO ISLAM in Kaduna (Nigeria) (192,414 views) OBJ’s son reported dead in Lagos plane crash •Names of more victims emerge (174,598 views) THE FINAL DISGRACE: Igbo scholar unleashes more facts about Igbo/Yoruba history, finishes off Femi Fani-Kayode with second article (159,542 views) My wasted years in Olumba Olumba Obu’s Evil Brotherhood (158,128 views) Lagos plane crash: Journalist releases victims’ names (152,577 views) Gunmen kill ASP, 2 other police officers in vain bid to kidnap Rivers PDP chieftain (142,920 views)

 

Categories Advertorials (3) African Press Organisation (81) Art & Literature (56) Business & Economy (3,452) Business Verdict (48) Columnists (909) Complaints & Requests (95) Enterprise & Opportunities (207) Entertainment (527) Features (633) Global Business Monitor (294) International (2,270) Interview (161) Live Commentary (28) Love Matters (134) News (38,039) Opinion (1,057) Pidgin (11) Politics (6,051) Religion (816) Sports (1,646) Stock Watch (33) AMA & Al Jazeera Global Update

 

CBN banner

Firstmobile banner

 

 

NEWS EXPRESS TV

Liverpool Destroying West Ham 4-0 - Highlights

 

APO Group Partner

 

 

CLASSIFIED ADS

GOCOP Accredited Member

GOCOP Accredited member

 

 

Africa Media Agency and Al Jazeera

Advertisement