For the second consecutive year, international financial services provider Allianz’s Risk Barometer indicates that critical infrastructure blackouts, attributed to power outages and the failure of ports, railways and roads, pose the greatest risk for businesses operating in South Africa.

The Allianz Risk Barometer compiles a yearly list of the top global business risks, based on the insights of more than 3 000 risk management professionals.

In a press release last month, Allianz noted that South Africa’s energy crisis, which is closely linked to its infrastructure struggles, ranked fifth, up from sixth place in 2023, with cyber incidents and business interruption retaining the second and third spots respectively.

Allianz Commercial South Africa urged businesses to be alert to infrastructure failures and disruptions to supply chains and their impact on the broader economy. Climate change and a fraught geopolitical environment also ranked as further impediments.

“The report underscores the important 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,” says Allianz Commercial South Africa CEO Thusang Mahlangu.

Meanwhile, from a global perspective, cyber incidents such as ransomware attacks, data breaches, and information technology disruptions were the biggest worry for companies in 2024. The interlinked peril of business interruption ranked second, while natural catastrophes (up from sixth to third year-on-year), fire and/or explosion (up from ninth to sixth) and political risks and violence (up from tenth to eighth) are the biggest risers in the latest rankings. Infrastructure concerns and blackouts did not rank in the top ten risks. 

Allianz Commercial CEO Petros Papanikolaou concludes: “The top risks and major risers in this year’s Allianz Risk 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.”