• 8^thannual survey on top business risks sees record participation of 2,415 expertsfrom 86 countries, including South Korea
• Businessinterruption is top risk again, followed by cyber incidents
• 2019edition sees new entrants in local top 10: Environmental risks and loss ofreputation or brand value

SEOUL, SOUTH KOREA - MediaOutReach - February 21, 2019 - Business interruption (BI) will be thetop business risk in South Korea this year with companies increasinglyconcerned about more diverse and complex business interruption scenarios withrising costs, according to the eighthannual Allianz Risk Barometer. Published by Allianz Global Corporate& Specialty (AGCS), the 2019 report is based on the insights of 2,415 riskexperts across 86 countries, including South Korea.

In South Korea, BI (45% of responses) remains the toprisk ahead of cyber (33% ofresponses). Rounding up the top three is newtechnologies (28% of responses), which rises up from #5 last year.

BI threats continue to evolve

South Korean businesses are deeplyconcerned about the impact of BI aspotential scenarios are becoming ever more diverse and complex in a globallyconnected economy, including breakdown of core IT systems, product recalls orquality issues, terrorism or political rioting or environmental pollution. Asiaand South Korea, is potentially exposed to business interruption losses becauseof economic growth and concentration of suppliers. As manufacturing andoutsourced services are migrated to countries in the region, so too are largeclaims.

Similarly, BI remains the top threat forbusinesses globally and regionally for the seventh year running, ranking top incountries such as the US,Canada, Germany, Singapore. In addition, both cyber and BI risks areincreasingly interlinked as ransomware attacks or accidental IT outages oftenresult in disruption of operations and services costing hundreds of millions ofdollars.

"Businessesacross Asia Pacific are deeply concerned about the impact of businessinterruption, which can be a consequence of the other top risks in the region,cyber and natural catastrophes. The risk of BI is heightened by today'sincreasingly interconnected and global business environment," said Chang TaeNoh CEO AGCS South Korea.

"Almost alllarge property insurance claims include a major BI element and the average BIclaim of over $3m is almost 40% higher than an average direct property loss. Asmanufacturing shifts east and with growing frequency of natural catastropheactivity in the region, Asia Pacific ins increasingly exposed to these lossesreflecting the importance for companies to adopt a holistic approach to riskmanagement."

Cyber -- growing awareness, growing losses

Cyber incidents continue to be an area of concern for South Koreanbusinesses. Countries with regional tensions have been found to be more likelyaffected by targeted cyber-attacks, and South Korea suffered the 6^thmost number of targeted attacks in the world in 2017[1].This is unlikely to improve in the future, as the number of cyber-attacksworldwide doubled in 2017 to 160,000, according to the Online Trust Alliance[2].According to AGCS analysis of insurance industry claims over the past fiveyears, the average insured loss from a cyber incident is now in excess of €2m,compared with almost €1.5m from the average claim for a fire / explosionincident.

Similarly, concern over cyber incidents is increasinglyglobally, following a watershed year of activity in 2018. Cyber-crime now costsan estimated $600bn a year -- up from $445bn in 2014[3].Thiscompares with a 10-year average economic loss from natural catastrophes of $208bn[4]-- three times as much.  

"Companiesneed to plan for a wide range of disruptive scenarios and triggers, as this iswhere their big exposure lies in today's networked society," says Chris FischerHirs, CEO of AGCS. "Disruptive risks can be physical, such as fire or storms,or virtual, such as an IT outage, which can occur through malicious andaccidental means. They can stem from their own operations but also from acompany's suppliers, customers or IT service providers. Whatever the trigger,the financial loss for companies following a standstill can be enormous. Newrisk management solutions, analytical tools and innovative partnerships canhelp to better understand and mitigate the modern myriad of BI risks andprevent losses before they occur."

Environmental risks (#7 with 17% of responses) and loss of reputation or brand value (#9with 11% of responses) are new entrants into the top 10 risks for South Koreanbusinesses.

More information on the findings of the Allianz RiskBarometer 2019, including global results, is available here:

• Top10 global business risks
• Executivesummary
• Fullreport
• Video
• AppendixResults for 34 countries
• Selectedinfographics