Cyber threats, business disruptions, macroeconomic developments are top business risks in MEA’s tech sectors

Risk management experts in the technology, media, and telecommunications (TMT) sector ranked the biggest business risks for TMT companies, with cyber incidents leading the list, the latest Allianz Risk Barometer report.

“Given TMT companies hold large amounts of personal information which can be a prime target for criminals and can be either sold on the dark web or used for fraud or to extort the victim for ransom, it is unsurprising that cyber incidents is a top concern,” the company explained in a statement.

The most important business risks in the Middle East and Africa were surveyed as cyber incidents with 33% of votes, followed by business interruptions (e.g. supply chain disruption) with 22%.

Cyber incidents were defined as cybercrime, IT network and service disruptions, malware/ransomware, data breaches, fines, and penalties.

Macroeconomic developments (e.g. inflation, deflation, monetary policies), critical infrastructure blackouts, and changes in legislation and regulation completed the top 5 challenges in the region.

The top ranked global challenge was cyber incidents according to 36% of survey respondents, followed by business interruption (31%), and natural catastrophes (26%).

Business interruption is the main cost driver for more than 50% of cyber claims globally, Allianz Commercial analysis showed, and is a significant driver for the rising severity of claims in recent years.

Allianz also explained that “given the large number of devices connected to a company’s network, ensuring adequate protection can prove to be an extremely challenging task, particularly for smaller-sized companies, and requires deep expertise and an individualized approach”.

“The long-term future outlook is positive, yet with such a rapid pace of change comes new risks, complexity, heightened regulatory scrutiny and increasingly global exposures,” it added.