Key Business Risks for Canadian Enterprises in 2024

Key Business Risks for Canadian Enterprises in 2024

[By: Alyssa DiSabatino] – In 2024, Canadian businesses are primarily concerned about disruptions in their operations, as highlighted by the Allianz Risk Barometer. The study identifies the top three risks Canadian companies face, offering a comparative global perspective.

Canada’s Top Business Risks in 2024

Business Interruption Leads the Concerns

The Allianz Risk Barometer 2024 reveals that most Canadian companies (57%) view business interruption as their primary risk. This concern surpasses other prevalent issues, with cyber incidents (46%) and natural disasters (43%) following closely behind. These figures reflect the concerns shared by businesses in Canada about potential disruptions to their operational flow.

Global Comparison: A Broader Perspective

Interestingly, the global perspective offers a different ranking of risks. Cyber incidents take the lead worldwide (36%), followed by business interruption (31%) and natural disasters (26%). This data, collected from 3,069 participants across 92 countries, suggests a more cyber-centric concern globally than the operationally focused anxieties in Canada.

Bernard McNulty, Allianz Commercial’s chief agent in Canada, attributes this mirrored nature of concerns partly to Canadian risk managers’ increased awareness of global issues. He cites the 2023 shipping disruptions, especially those related to the Panama Canal, as a significant factor impacting Canadian imports.

Addressing Supply Chain Vulnerabilities

To mitigate supply chain risks, businesses are adopting strategies such as developing alternative suppliers, enhancing business continuity management, and remedying supply chain bottlenecks. However, Canadian companies have faced challenges in localizing production as a response to these risks, often finding it cost-prohibitive compared to overseas manufacturing.

The Complexity of Growing Businesses

As businesses expand and integrate new technologies or machinery, their operations grow more complex. According to McNulty, this complexity is a key reason for the heightened sense of risk, especially when a loss occurs, as the recovery process becomes increasingly intricate and resource-intensive.

Cybercrime and natural disasters also contribute to this sense of risk due to their potential for operational disruption. McNulty notes that every sector in Canada is susceptible to cybercrime, and while businesses may be resilient to severe weather, their employees’ personal properties are not.

Year-Over-Year Risk Comparison

The ranking of top risks has slightly shifted from 2023. Previously, cyber incidents, skilled workforce shortage, and climate change were the foremost concerns. Although still in the top five, the skilled workforce shortage has moved down, possibly due to increased investments in employee sourcing and hiring. Interestingly, the top risks for 2024 mirror those of 2022, suggesting a recurring pattern in the business risk landscape.