General Insurance Article - Cyber remains top business risk but AI rises to second

Cyber incidents created many headlines in 2025 and are still the biggest worry for companies globally in 2026, according to the Allianz Risk Barometer. The past year has also been a significant one for accelerated adoption of artificial intelligence (AI), which is reflected in its ranking as the biggest riser in the annual survey at #2 as a complex source of operational, legal, and reputational risk for businesses. Still, close to half of respondents believe AI is bringing more benefits to their industry than risks. However, a fifth says the opposite. For the first time ever, Business interruption is not in the top two risks, dropping to #3.  Yet, this peril remains a significant concern given it can be a consequence of other risks in the global top 10.

 

Factors such as a quieter hurricane season in terms of losses during 2025, mean Natural catastrophes drops to #5, year-on-year. Meanwhile, Political Risks and Violence climbs from #9 to #7, driven by increasing concerns over geopolitical volatility and conflicts around the world.

 

Allianz Commercial CEO Thomas Lillelund comments: “Following the volatility and uncertainty of 2025, businesses continue to face interconnected and highly complex risks in 2026’s fast-changing environment. Given the continuing rise of AI across society and industry, it is unsurprising that it is the big mover in the Allianz Risk Barometer. As well as bringing huge opportunities, its transformative potential and rapid evolution and adoption are also reshaping the risk landscape, making it a standout concern for firms of all sizes worldwide, alongside other more established threats.”

 

While the UK mostly mirrored the global rankings of risks, the consolidations around cyber and AI risk were notably different to the global numbers. There was a 51% increase in concerns about cyber risk (from 41% to 62%) whereas globally the number rose slightly from 38% to 42%. Similarly, concern around AI risk in UK rose from 22% in 2025 to 51% in 2026 – versus a smaller leap from 10% to 32% globally. The growing risks surrounding AI and the potential for an emerging AI bubble could also be the reason for market developments becoming a new entry at eighth in the rankings whereas globally it has fallen to 10th place from eighth last year.

 

There are significant points of divergence between the UK and global numbers, particularly around concern over political risks which 22% of respondents highlighted in the UK – versus 15% globally. Interestingly, while climate change rose up the rankings in the UK to become the sixth most important risk, natural catastrophes fell to 10th down from 21% in 2025 to just 8% this year. However, globally natural catastrophes was the fifth biggest concern for businesses with 21%.

 

Allianz Commercial Managing Director for the UK, Phuong Ly comments: “Although the UK shares many global risk trends, UK business leaders see the threat landscape differently. Concerns about cyber security and fast-changing artificial intelligence are rising much faster here than elsewhere. This growing focus on technology risks is changing which issues UK companies see as most important, putting market stability and political uncertainty lower on their agenda. UK businesses are now paying more attention to digital and regulatory risks, rather than just physical threats like natural disasters. For many organisations, the main challenge has shifted from the physical world to the digital and legal environment.”

 

In 2026, cyber incidents is the top global risk for the fifth year in a row, with its highest-ever score (42% of responses), and by a higher margin than ever before (+10%). It ranks as the main corporate concern in every region (Americas, Asia Pacific, Europe, and Africa and Middle East). The continued presence of cyber at the top of the Allianz Risk Barometer reflects a deepening reliance on digital technology at a time when the cyber threat landscape, and geopolitical, and regulatory environments, are fast evolving. Recent high-profile cyber-attacks underline the continuous threat to businesses of all sizes. Smaller and mid-sized enterprises are increasingly targeted and under pressure due to a lack of cyber security resources.

 

“Large companies’ investments in cyber security and resilience have been paying off, ensuring they can detect and respond to attacks early. However, cyber risk continues to evolve. Organizations are increasingly reliant on third party providers for critical data and services, while AI is supercharging threats, increasing the attack surface and adding to existing vulnerabilities,” explains Michael Bruch, Global Head of Risk Consulting Advisory Services, Allianz Commercial.

 

AI creates emerging risks as well as new business opportunities

AI has surged into the top tier of global business concerns, rising to #2 (32%) in 2026 from #10 in 2025 – the biggest jump in this year’s ranking. It is a big mover in all regions – ranked #2 in the Americas, Asia Pacific, and Africa and the Middle East, and #3 in Europe – and is a growing risk for companies of all sizes too, moving into the top three for large, mid-sized and smaller firms. As AI adoption accelerates and becomes more deeply embedded in core business operations, respondents expect AI-related risks to intensify, especially when it comes to liability concerns. The rapid spread of generative and agentic AI systems, paired with their growing real-world use, has raised awareness of just how exposed organizations have become.

 

“Companies increasingly see AI not only as a powerful strategic opportunity but also as a complex source of operational, legal and reputational risk. In many cases, adoption is moving faster than governance, regulation, and workforce readiness can keep up,” says Ludovic Subran, Chief Economist, Allianz. “As more firms attempt to scale in 2026, they will face greater exposure to system-reliability issues, data-quality constraints, integration hurdles, and skilled talent shortages. Meanwhile, new liability exposures are emerging around automated decision-making, biased or discriminatory models, intellectual-property misuse, and uncertainty over who is responsible when AI-generated outputs cause harm.”

 

2025 marked a shift towards protectionist trade policies and tariff wars that brought uncertainty to the world economy. It was also a year of regional conflicts in the Middle East and Russia/Ukraine, as well as border disputes between India/Pakistan and Thailand/Cambodia and civil wars in Africa – a trend which continues in 2026 with the US intervention in Venezuela. Geopolitical risks are putting supply chains under increasing pressure, but as risks rise, just 3% of Allianz Risk Barometer respondents view their supply chains as “very resilient”. In the past year alone, trade restrictions have tripled to affect an estimated US$2.7trn of merchandise – nearly 20% of global imports according to Allianz Trade – fueling companies exploring trends such as friendshoring and regionalization. These developments lead to a high-risk perception – 29% of respondents rank business interruption as a top peril, placing it at #3, although it drops a position year-on-year.

 

Unsurprisingly, political risks and violence climbs two places to #7, its highest-ever ranking. The closely linked risk of changes in legislation and regulation – which includes trade tariffs – ranks #4 globally, unchanged year-on-year but with an increase in respondents, driven by concerns over growing protectionism. In fact, global supply chain paralysis due to a geopolitical conflict ranks as the most plausible “black swan” scenario likely to materialize in the next five years, according to 51% of the respondents.