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Thirty-eight percent of 3 000 risk management professionals and business leaders agree that natural catastrophes, fire and explosion risks are emerging as primary concerns in the engineering, construction and real estate industries.
According to Allianz Risk Barometer, respondents to its survey said natural disaster risks were followed by business interruption, macroeconomic developments and cyber-incidents as concerns with 28%, 21% and 19% of respondents citing as such, respectively.
The latest Allianz Risk Barometer report highlights the urgent need for proactive risk management and comprehensive disaster preparedness to ensure business continuity and safeguard against potential disruptions.
The Allianz Risk Barometer is published on a yearly basis by Allianz Group’s corporate insurer Allianz Commercial, together with other Allianz entities. It incorporates the views of risk management experts in 92 countries and territories including CEOs, risk managers, brokers and insurance experts.
This year, respondents said natural catastrophes such as hurricanes, earthquakes and floods pose a major threat to industrial activity, causing damage to infrastructure, delaying construction projects and disrupting real estate markets.
In turn, fire and explosion risks are a significant concern during the construction phase and in occupied buildings. The report finds that 31% of respondents consider this the biggest risk.
To mitigate these risks, industry participants must focus on fire prevention measures, including adherence to standards, installation of detection systems and collaboration with experts for emergency response planning, Allianz suggests.
Moreover, contingency planning and diversification of project portfolios, as well as leveraging technology and conducting thorough risk assessments, are recommended to mitigate against business disruptions.
To address macroeconomic development risks, such as inflation, economic downturns and changes in interest rates, Allianz suggests that industries remain vigilant and adaptive to changing economic conditions while also exploring opportunities for growth and diversification.
Macroeconomic developments typically impact on project financing, demand for construction services and property values.
With cyber-incidents also becoming a growing concern for the engineering, construction and real estate industries, Allianz says robust cybersecurity measures such as encryption and employee training are essential to protect sensitive data and maintain operational continuity.
"By implementing effective risk management strategies and disaster preparedness measures, businesses can enhance their resilience and ensure continuity in the face of various challenges,” says Allianz Commercial South Africa property head Geoff Tanton.
He adds that the engineering, construction and real estate industries play a vital role in driving economic growth and development.
“As the industry faces an array of risks, it is crucial for businesses to prioritize risk management and adopt proactive measures to protect their assets, employees and reputation.”