Geopolitical instability and growing interconnectivity are driving concern about the plausibility of black swan events over the next five years, according to the latest Allianz Risk Barometer.

More than half of respondents globally (51% of over 3,000 risk professionals surveyed) identified a global supply chain paralysis caused by geopolitical conflict as the most plausible extreme scenario affecting their business. A global internet outage ranked second at 47%.

In the UK, 69% of respondents cited a global internet outage triggered by a major cyber attack or technology failure as the country’s most feared black swan event, well above the global average. Supply chain paralysis followed at 46%, while the sudden collapse of a major financial institution ranked third.

Black swan events, though often clearer in hindsight, can inflict severe economic damage. Allianz estimates cumulative global GDP losses from the Covid-19 pandemic between 2020 and 2023 at around £9.5tn. It also suggests that a supply chain disruption on the scale of the war in Ukraine could lead to losses of about £1.2tn over two years.

Michael Bruch, global head of risk consulting advisory services at Allianz Commercial, commented: “Awareness of black swans and the need to build resilience has increased in recent years, but businesses can never fully prepare for rare high impact events. Building organisational agility, fostering a risk-aware culture and developing scalable response plans for a range of scenarios remain the most practical steps to best prepare for black swan events."

In compiling its analysis, Allianz canvassed the views of 3,338 risk management professionals in 97 countries and territories.

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