Business interruption, Fire & explosion, and Natural catastrophes such as storms and floods tie as the top business risks in Malaysia. Changes in legislation and regulation such as tariffs and economic sanctions and Cyber incidents such as ransomware attacks, data breaches, and IT disruptions are the 4 th biggest worry for companies in Malaysia in 2024, according to the Allianz Risk Barometer.
The insights are from more than 3,000 risk management professionals. Globally and in Asia, the top three risks are Cyber incidents, Business interruption and Natural catastrophes. Other major concerns of companies in Asia include Fire, explosion
Allianz Commercial CEO Petros Papanikolaou comments on the findings: “The top risks and major risers in this year’s Allianz Risk Barometer reflect the big issues facing companies around the world right now – digitalization, climate change and an uncertain geopolitical environment. Many of these risks are already hitting home, with extreme weather, ransomware attacks and regional conflicts expected to test the resilience of supply chains and business models further in 2024. Brokers and customers of insurance companies should be aware and adjust their insurance covers accordingly.”
Large corporates, mid-size, and smaller businesses are united by the same risk concerns – they are all mostly worried about cyber, business interruption and natural catastrophes. However, the resilience gap between large and smaller companies is widening, as risk awareness among larger organizations has grown since the pandemic with a notable drive to upgrade resilience, the report notes. Conversely, smaller businesses often lack the time and resources to identify and effectively prepare for a wider range of risk scenarios and, as a result, take longer to get the business back up and running after an unexpected incident.
Top risks in Malaysia
Rafliz Ridzuan, Chief Underwriting Officer, Allianz General Insurance Company (Malaysia) Berhad, said: “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. 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. It is crucial that companies have robust risk management plans and supply chains in place to enhance
resilience and withstand business interruption.”
Due to Malaysia’s topography, the country has been susceptible to coastal flooding and flash floods, both of which are increasing in frequency and intensity caused by global warming especially over the last few years. Based on the climate change projection reports released by the World Bank, floods are likely to occur 20% more over the next five years.
Last year also saw a number of fires in the country, one occurring in Kuala Lumpur’s biggest and most popular malls, Mid Valley Megamall. A fire broke out at the main power substation resulting in the closure of the mall for one day. Earlier in 2023, two fires caused by an
More recently, a fire broke out at Bukit Selambau affecting three recycling facilities storing recyclable materials such as metal, wires, copper and large batteries. It was reported that the three recycling facilities were operating without proper authorisation and had failed to comply with Department of Environment regulations. Firefighting operations took over 80
hours to complete.
