‘Cost of living crisis’ the top perceived risk to Australia and New Zealand businesses

SYDNEY, Australia – Zurich Financial Services Australia (Zurich) today revealed that the ‘cost of living crisis’ is the top perceived risk to Australia and New Zealand businesses, following a survey of more than 12,000 executives by the World Economic Forum (WEF) in collaboration with Zurich and Marsh McLennan.

The annual ‘Executive Opinion Survey’ asked leaders from over 122 countries to identify five key risks they believe pose a threat to their nation in the next two years. The results come ahead of COP27 in Egypt and the G20 summit in Indonesia later this month.

Australian executives identified the ‘cost of living crisis’ as the top perceived threat to their businesses. This was followed by ‘rapid and/or sustained inflation’, ‘debt crises’, ‘geo-economic confrontation’ and lastly, ‘failure of climate-change adaptation’. Risks relating to extreme weather and infectious disease were this year missing from the top five.

Conducted between April and August 2022, this year’s survey results differed significantly from 2021¹, which saw ‘failure of cybersecurity measures’ identified as the top perceived risk, followed by ‘extreme weather events’, ‘climate action failure’, ‘infectious diseases’ and ‘debt crises in large economies’.

Jaimie Sach, Chief Risk Officer, Zurich Australia & New Zealand said: “Our role as an insurer is to protect people and businesses from risk and increase their resilience. This data provides an important insight into the risks keeping Australian corporate leaders awake at night.”

“Many Australians are currently experiencing the risks predicted in the 2021 survey, such as cybersecurity threats and extreme weather. When we consider the top ranked risks in the 2022 survey, it is also unsurprising that cost of living and the impacts of inflation are causing concern. The effects of these issues are certainly being felt not just in Australia, but across the globe.”

New Zealand also saw the ‘cost of living crisis’ as the number one risk to business, followed by ‘rapid and/or sustained inflation’, ‘natural disasters and extreme weather events’, ‘asset bubble burst’ and ‘debt crises’.

East Asia and the Pacific

Across East Asia and the Pacific, risks aligned closely with those identified in Australia and New Zealand. The top perceived risk was ‘rapid and/or sustained inflation’, followed by ‘geo-economic confrontation’, ‘cost of living crisis’, ‘debt crises’ and ‘geo-political contestation of strategic resources’.

A number of risks were higher in East Asia and the Pacific than in global rankings. This included ‘infectious diseases’, ‘asset bubble burst’ and ‘misinformation’.

Conversely, risks such as ‘state collapse’, ‘employment and livelihood crises’ and ‘severe commodity supply’ were all lower perceived risks compared with global rankings.

¹ https://www.weforum.org/reports/global-risks-report-2022/in-full/appendix-b-executive-opinion-survey-national-risk-perceptions/

ENDS