Critical infrastructure blackouts will be the biggest risks facing South African businesses in 2024.

This is the second consecutive year that power disruptions and failure of essential infrastructure such as ports, railways, and roads have topped the list of threats to the country’s economy and businesses.

Cyber incidents, business interruptions, natural catastrophes, and the energy crisis complete the list of top five risks to local companies this year, according to the Allianz Risk Barometer – which incorporates the views of 3,069 risk management experts in 92 countries.

Thusang Mahlangu, chief executive of Allianz Commercial South Africa, says South Africa's business community must remain vigilant in the face of critical infrastructure blackouts. The persistent threat of power outages and infrastructure failures poses significant challenges to businesses, disrupting supply chains, and impacting the overall economy.

“The report underscores the urgent need for investment in infrastructure resilience and the development of contingency plans to mitigate the potential consequences of blackouts. By proactively addressing these risks, businesses can enhance their ability to withstand disruptions and ensure continuity of operations.”

Internationally, the barometer reveals that cyber incidents such as ransomware attacks, data breaches, and IT disruptions are this year’s biggest worries for companies. This is followed by:

Business interruption – including supply chain disruption
Natural catastrophes – storms, floods, earthquakes, wildfires, and extreme weather events
Changes in legislation and regulation – tariffs, economic sanctions, protectionism, and Euro-zone disintegration
Macroeconomic developments – inflation, deflation, monetary policies, and austerity programmes

Allianz Commercial chief executive Petros Papanikolaou says the top risks and major risers in this year’s Barometer reflect the big issues facing companies around the world right now – digitalisation, 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.”

IOL Business