Top 5 risks in Financial Services
This IFrame contains external resources. The provider may be collecting information about your interaction with this content by using cookies and may use this for targeting their offers. Please accept cookies in order to show the IFrame.
1. The Covid-19 risk landscape
- Large corrections or adjustments in markets – such as in equities, bonds or credit – could bring litigation from investors and shareholders.
- Directors and officers may be held accountable if there has been a failure to foresee or disclose Covid-19 related risks. Increased scrutiny around how companies prepare for future events.
- Rise in homeworking, fast adoption of new technologies, potentially weaker controls and oversight make companies/customers more vulnerable to cyber scams, and other internal/ external crimes.
- Inadequate return to office plans could see employers face liabilities related to Covid-19 infections, employment practices and whistleblowing.
2. Cyber security concerns grow
- Growing numbers and new forms of financial crime, driven by Covid-19. At the beginning of the pandemic, the number of cyber-attacks rose by over 200%.
- Seismic shift in the regulatory view of privacy and cyber security. Cyber resilience and business continuity a growing area of focus.
- Third party service providers can be a weak link in the cyber security chain.
- Investing in training helps minimize the human error at the heart of most cyber incidents.
3. Unintended consequences of innovation and new technologies
- Proliferation of new technologies will have a profound impact on the sector’s risk profile.
- Digital currencies are emerging as a new asset class. However, there is uncertainty around potential asset bubbles and regulation and concerns about money laundering, ransomware attacks, third party liabilities and ESG issues.
- Growth in stock market investing by small investors guided by social media, raises mis-selling concerns.
4. ESG factors take center stage
- Only a third of companies consider themselves to be very effective at managing ESG risk.
- Surge in ESG regulations and guidance means tougher disclosure and reporting requirements for companies.
- Litigation or investor, shareholder and activist actions increasingly focus on ESG topics such as climate change, pollution, diversity and even CEO pay.
- Elevating and identifying ESG risks through a business’ risk registers and committees, and making sure it is understood how they will play out in and out of the boardroom, is crucial.
- AGCS analysis of financial services insurance claims shows cyber incidents, including crime, ranks as the top cause of loss according to value.
- Growing compliance risk a concern as compliance issues are already one of the biggest drivers of claims. Violations can be contributing factors to each of the top 10 causes of loss by severity.
- Covid-19 claims activity to date limited. However, uncertainty over the pandemic and economic fallout continues to pose a risk for lending institutions.
Top 10 causes of loss by value
This IFrame contains external resources. The provider may be collecting information about your interaction with this content by using cookies and may use this for targeting their offers. Please accept cookies in order to show the IFrame.
6. Market dynamics – insurance outlook
- Loss activity and Covid-19 uncertainty have contributed to a recasting of the insurance market characterized by adjusted pricing and an enhanced focus on risk selection by insurers.
- A growing number of companies are partnering with insurers on alternative risk transfer solutions to manage risk and regulatory capital requirements
Our experts
Shanil Williams
Board Member and Chief Underwriting Officer Corporate
Anton Lavrenko
Head of Financial Institutions North America
Marek Stanislawski
Global Cyber Underwriting Lead
David Ackerman
Global Claims Key Case Management
Jeremy Sharpe
Global Head of Distribution
Hannah Tindal
Head of D&O, Regional Unit London & Nordics
Grant Maxwell
Global Head of Alternative Risk Transfer
All the latest news, reports and hot topics
Video
Allianz Multinational - Ready on all fronts
Allianz Multinational offers a fully end-to-end customized service for the cross-border exposures of its clients, covering also risk transfer and captive services.
Watch here
Report
Allianz Risk Barometer 2024
The most important corporate concerns for the year ahead, ranked by 3,069 risk management experts from 92 countries and territories.
Read more
Global I Press release
A cyber event is the top global business risk
Allianz Commercial publishes the 13th annual survey of key business risks around the world, according to 3000+ respondents.
Read more
Allianz Risk Barometer 2024 | Expert risk article
Risk in focus: Fire, explosion
Ranking #6 overall, fire, explosion (19%), up from #9 in 2023, is a significant peril for companies and global supply chains.
Read more
Allianz Risk Barometer 2024 | Expert risk article
Risk in focus: Natural catastrophes
In a sign that companies are feeling the impact of extreme weather and climate events, natural catastrophes rank #3, up three positions on last year.
Read more
Allianz Risk Barometer 2024 | Expert risk article
Risk in focus: Climate change
Climate change (18%) may be a non-mover year-on year at #7, but this risk’s importance is clearly also reflected in natural catastrophes’ rise in the rankings.
Read more
Allianz Risk Barometer 2024 | Expert risk article
Risk in focus: Market developments
Protectionism is one of three paradigm shifts identified as being behind market developments (13%) rising to #9.
Read more
Allianz Risk Barometer 2024 | Expert risk article
Risk in focus: Cyber incidents
Cyber incidents is the top global risk in the Allianz Risk Barometer – for the first time by a clear margin (36% of responses, 5 percentage points ahead).
Read more
Allianz Risk Barometer 2024 | Expert risk article
Risk in focus: Macroeconomic developments
Despite the ongoing uncertain global economic outlook, macroeconomic developments (19%), which ranked #3 last year, falls to #5 in 2024.
Read more
Allianz Risk Barometer 2024 | Expert risk article
Top risks for smaller and mid-size companies
Whether cyber-attack or flood, loss events tend to hit smaller and mid-size companies much harder, with longer periods of disruption.
Read more
Allianz Risk Barometer 2024 | Expert risk article
Risk in focus: Political risks and violence
Unsurprisingly, given ongoing conflicts in the Middle East and Ukraine, and tensions between China and the US, political risks and violence (14%) rises up to #8 from #10.
Read more
Allianz Risk Barometer 2024 | Expert risk article
Risk in focus: Business interruption
Business interruption (31%) retains its position as the second biggest threat in the 2024 survey.
Read more
Report
D&O insurance insights 2024
Our Allianz Commercial experts discuss the top risk trends boards of management need to guard against in 2024.
Read more
UK | Press release
New Head of Financial Lines UK, Large-Corp and Specialty
Allianz Commercial announced the appointment of Sharanjit Chaggar as Head of Financial Lines for Large-Corp and Specialty in the UK.
Read more
Global I Press release
Leadership change
Petros Papanikolaou will succeed Joachim Müller as CEO of Allianz Global Corporate & Specialty SE and Allianz Commercial.
Read more
Keep up to date on all news and insights from Allianz Commercial