Cyber tops business threats in 2025 – Allianz

Findings were based on CEOs, risk managers, insurance professionals, and brokers

Cyber tops business threats in 2025 – Allianz

Catastrophe & Flood

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Cyber incidents, including data breaches, ransomware attacks, and IT outages, have been ranked as the top business risk for 2025, according to the latest Allianz Risk Barometer report.

Business interruption (BI) follows as the second-largest concern globally, with natural catastrophes rounding out the top three. Climate change climbed to its highest position yet in the 14-year history of the survey, reaching fifth place.

The findings are based on input from 3,778 respondents, including CEOs, risk managers, insurance professionals, and brokers, spanning 106 countries and territories.

Cyber risks

The report found cyber risks remain the most pressing issue for businesses worldwide for the fourth consecutive year, with 38% of respondents citing it as their primary concern. The increasing sophistication of cyberattacks and the growing reliance on technology have driven this trend.

Rishi Baviskar, global head of cyber risk consulting at Allianz Commercial, noted that the accelerated adoption of artificial intelligence (AI) has further exacerbated these risks.

“It is likely to remain a top risk for organisations going forward, given the growing reliance on technology – the CrowdStrike incident in summer 2024 once again underlined how dependent we all are on secure and dependent IT systems,” he said.

Business interruption

Business interruption retained its second-place ranking, with 31% of respondents identifying it as a critical challenge.

BI risks are often a direct result of other major disruptions, such as cyberattacks, natural disasters, or supply chain issues. Notable examples from 2024 include the collapse of the Francis Scott Key Bridge in Baltimore and shipping disruptions in the Red Sea caused by geopolitical tensions.

Michael Bruch, global head of risk advisory services at Allianz Commercial, stressed the importance of resilience in navigating these risks.

“The push for technological advancement and efficiency is affecting the resilience of supply chains. Automation and digitisation have significantly accelerated processes, which sometimes overwhelm individuals due to the rapid pace and complexity of modern technology,” he said.

He added that when implemented effectively, these technologies can also enhance resilience by providing better data analytics, predictive insights, and more agile response capabilities.

Natural disasters

Natural catastrophes ranked third globally, driven by an active year for extreme weather events in 2024. These included hurricanes in North America, severe flooding in Europe and Asia, and droughts in Africa and South America.

For the fifth year in a row, insured losses from natural catastrophes exceeded US$100 billion, according to the report. Businesses in Australia continue to contend with the aftermath of major flooding in 2022, as well as the ongoing threat of bushfires.

Climate change

Climate change climbed from seventh to fifth place in the rankings, marking its highest position to date. Allianz attributed this to the increasing frequency and severity of climate-related risks, as well as growing regulatory and public pressure for businesses to adopt sustainable practices.

Vanessa Maxwell, chief underwriting officer at Allianz Commercial, highlighted the interconnected nature of climate risks with other challenges such as regulation and emerging technology.

“Businesses need to adopt a holistic approach to risk management and consistently strive to enhance their resilience in order to address these fast-evolving risks,” she said.

Regulatory and legislative changes

Regulatory and legislative changes emerged as the fourth most significant risk, reflecting the growing complexity of compliance requirements in areas such as privacy, industrial relations, and climate reporting.

In Australia, regulatory concerns rose to second place, underscoring the heightened focus on compliance in the wake of developments like ransom attack laws and environmental disclosure requirements.

“With the increasing frequency and sophistication of cyber threats, it’s crucial for businesses to take a proactive approach to their cyber security and ensure they have adequate insurance cover in place,” said Phuong Ly, chief general manager at Allianz Australia Commercial.

Geopolitical risks

Geopolitical risks, including trade wars and protectionism, ranked ninth overall but remain a key issue for large organisations, where they rose to seventh place.

Allianz’s chief investment officer, Ludovic Subran, pointed to the economic challenges posed by rising export restrictions and tariffs.

“The effect of new tariffs will be pretty much the same as with (over) regulation: ramping up costs for all companies affected. However, not every regulation is inherently ‘bad.’ And more often than not, it is the implementation of rules that make corporate life difficult,” he said.

He also emphasised the need for streamlined regulatory processes to reduce compliance burdens.

“A thorough digitisation of the administration is urgently needed. However, in 2025, too, we will probably still be waiting in vain for a corresponding digital strategy. Instead, trade wars are coming. The outlook is not rosy,” Subran said.

The Allianz Risk Barometer also revealed that smaller businesses are increasingly exposed to risks that have historically been more prevalent among larger organisations. Climate change and geopolitical tensions are now climbing the list of concerns for small and mid-sized enterprises, although local issues like labour shortages and economic uncertainty remain their primary challenges.

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