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ALLIANZ ANNOUNCES THE TOP FIVE RISING RISKS WITHIN GOVERNMENT AND PUBLIC SERVICES SECTOR
About the Allianz Risk Barometer
The Allianz Risk Barometer is an annual business risk ranking compiled by Allianz Group’s corporate insurer Allianz Commercial, together with other Allianz entities. It incorporates the views of 3,069 risk management experts in 92 countries and territories including CEOs, risk managers, brokers and insurance experts and is being published for the 13th time.
The Allianz Risk Barometer 2024 has identified the top five risks facing the government and public services sector, emphasizing the critical challenges that require urgent attention in both Africa and the Middle East.
Addressing rising risks is essential for ensuring the stability and efficiency of public services. The report, based on insights from over 3,000 risk management professionals and business leaders, highlights the growing importance of addressing these risks to ensure business continuity and safeguard against potential disruptions.
Cyber Incidents (37% of responses)
Cyber incidents have surged to the top risk for government and public services, up from the second position in 2023. The increasing digitalization of public services and healthcare systems makes them prime targets for cyber-attacks. To mitigate this risk, governments must invest in robust cybersecurity frameworks, including advanced
threat detection, regular security audits, and comprehensive incident response plans. Training public sector employees on cybersecurity awareness and best practices is also crucial to enhancing organizational resilience against cyber threats.
#2. Shortage of Skilled Workforce (29% of responses)
The shortage of a skilled workforce poses a significant challenge for the public sector. The growing demand for qualified professionals in healthcare, education, and public administration is outstripping supply. To address this issue, governments should implement strategies to attract and retain talent, such as: offering competitive compensation, investing in education, and training programs, and promoting career development opportunities. Partnerships with educational institutions to align curricula with industry needs can also help bridge the skills gap.
#3. Changes in Legislation and Regulation (23% of responses)
Changes in legislation and regulation remain a prominent concern for the public sector. The dynamic regulatory environment requires continuous adaptation and compliance. Governments and public service providers should establish dedicated compliance teams to monitor and respond to legislative changes. Engaging with policymakers and stakeholders to influence regulatory developments and ensure alignment with organizational goals is also essential. Implementing robust compliance management systems can help navigate regulatory complexities in a timely and effective manner.
#4. Macroeconomic Developments (23% of responses)
Macroeconomic developments, such as economic volatility and fiscal constraints, pose significant risks to public services. These developments can impact budgets, resource allocation, and service delivery. Governments should adopt prudent fiscal policies, diversify revenue streams, and enhance financial planning to mitigate the effects of economic fluctuations. Engaging in publicprivate partnerships and leveraging international financial support can also provide additional stability and resources for public services.
#5. Natural Catastrophes (20% of responses)
Natural catastrophes, including floods, droughts, and extreme weather events, present substantial risks to the public sector. These events can disrupt essential services, damage infrastructure, and strain emergency response systems. To mitigate the impact of natural catastrophes, governments should invest in resilient infrastructure, develop comprehensive disaster preparedness plans, and utilize early warning systems. Collaboration with international agencies and neighbouring countries can also improve disaster response and recovery efforts.
Mitigation Strategies and Sector Collaboration
Addressing these top risks requires a collaborative approach and strategic investments in key areas. Governments and public service providers should consider:
1. Enhancing Cybersecurity Measures: Implement advanced cybersecurity technologies and conduct regular training programs for employees.
2. Investing in Workforce Development: Create initiatives to attract, retain, and develop skilled professionals in critical sectors.
3. Strengthening Regulatory Compliance: Establish dedicated compliance teams and engage with policymakers to influence legislative changes.
4. Adopting Prudent Fiscal Policies: Enhance financial planning and explore public-private partnerships to ensure economic stability.
5. Developing Resilient Infrastructure: Invest in infrastructure upgrades and disaster preparedness to mitigate the impact of natural catastrophes.
By proactively addressing these risks, the government and public services sector in Africa and the Middle East can improve the provision of essential services and enhance the overall resilience and effectiveness of public administration.
About Allianz Commercial
Allianz Commercial is Allianz Group's global specialist for insuring mid-sized businesses, large enterprises, and unique risks. Supported by Allianz's global network and strong financial backing, we provide a broad range of risk management solutions, consulting, and claims services.
Our diverse client base includes major consumer brands, financial institutions, and industries worldwide, along with sectors like aviation, shipping, and infrastructure. We also cover specialized areas like offshore wind farms and film productions.
For further information please contact:
Johannesburg: Lesiba Sethoga Tel. +27 112 147 948
Email: lesiba.sethoga@allianz.com
