Allianz Risk Barometer 2025 – Key Business Risks｜International

The 14th Allianz Risk Barometer surveyed 3,778 risk management experts across 106 countries and 24 industries, identifying the top business risks for 2025. The results reflect increasing complexity and interconnectivity among risks, requiring businesses to adopt a holistic risk management approach. Resilience is seen as key in the current volatile environment, but there’s concern it may lose priority amid short-term pressures.

1. Cyber incidents (e.g., cyber crime, IT network and service disruptions, malware/ransomware, data breaches, fines, and penalties)

Cyber incidents remain the top global business risk for 2025, with ransomware attacks, data breaches, and IT outages driving concerns across industries and regions. The growing reliance on technology and rapid AI advancements have intensified cyber threats, making it the primary risk in 20 countries and across various sectors, including finance, media, and aviation. Ransomware now accounts for 58% of large cyber insurance claims, while data breaches are the most feared cyber exposure, fueled by stricter regulations and increasing attacker sophistication. AI, a new entrant in the top 10 risks, presents both opportunities and challenges—enhancing cybersecurity while also enabling cybercrime. As cyber risks become more complex and interconnected with business interruption and ESG concerns, companies must adopt a holistic approach to cybersecurity, AI governance, and resilience planning to mitigate future risks.

According to Arctic Wolf, cyber insurance adoption is growing, particularly in highly regulated industries like finance and healthcare, while less regulated sectors such as retail and manufacturing lag behind. Currently, 62% of organizations have cyber insurance, with 69% opting for standalone policies, and another 38% are considering coverage. Many companies are recent adopters, with 34% having purchased policies within the last year. While cyber insurance offers financial protection, organizations often face higher premiums and stricter security requirements after filing a claim. Read more about Cyber risk here.

2. Business interruption (incl. supply chain disruption)

Business interruption (BI) has ranked either #1 or #2 in every Allianz Risk Barometer for the past decade, driven by cyber incidents, supply chain disruptions, and geopolitical instability. In 2025, it is the leading risk in the Asia Pacific region and key industries like food, energy, and manufacturing. Rapid technological advancements have made supply chains more efficient but also more vulnerable, as seen in the massive CrowdStrike IT outage of 2024. Climate change has also intensified BI risks, with extreme weather events and natural disasters causing record insured losses. Political risks, including civil unrest and trade restrictions, further threaten supply chain stability. To mitigate these risks, companies are focusing on diversifying suppliers, investing in clean technology, and enhancing insurance coverage. However, long-term resilience planning remains a challenge, requiring stronger collaboration between businesses, insurers, and governments to address the evolving risk landscape.

3. Natural catastrophes (e.g., storm, flood, earthquake, wildfire, extreme weather events)

Natural catastrophes remain a top global risk, with insured losses exceeding $100 billion for the fifth consecutive year. In 2024, extreme weather events such as hurricanes, severe convective storms, floods, and earthquakes resulted in $310 billion in total economic losses. Severe convective storms alone accounted for $57 billion in damages, with the U.S. bearing the majority. Climate change continues to drive the increasing frequency and intensity of these disasters, making 2024 the warmest year on record, with global temperatures surpassing 1.5°C above pre-industrial levels. With rapid urbanization and land-use changes exacerbating the impact, businesses and governments must prioritize resilience measures to mitigate future risks. In Belgium, Assuralia is satisfied with the new government’s commitment to establishing a clear legislative framework for compensating victims of natural disasters and ensuring tax stability for complementary pensions. Given the increasing frequency of extreme weather events, the federation emphasizes the need for an efficient and fair compensation system.

4. Changes in legislation and regulation (e.g., new directives, protectionism, environmental, social, and governance, and sustainability requirements)

In 2025, legislative and regulatory changes remain a major concern for businesses, with sustainability reporting and geopolitical trade policies at the forefront. In Europe, the Corporate Sustainability Reporting Directive (CSRD) aims to enhance transparency on climate risks but adds compliance burdens. Meanwhile, the Corporate Sustainability Due Diligence Directive (CS3D) faces criticism for potentially driving companies away from high-risk markets. In the U.S., deregulation under the new administration may lead to a “regulatory Wild West”, particularly in cryptocurrency and AI, raising concerns about financial crime and misinformation. Additionally, rising tariffs threaten to increase costs and fuel trade tensions. While reducing bureaucracy is a common goal, balancing regulation and competitiveness remains a challenge.

5. Climate change

In 2025, climate change has reached its highest-ever ranking in the Allianz Risk Barometer, driven by record-breaking global temperatures, extreme weather events, and mounting business disruptions. With 2024 being the hottest year on record and insured losses exceeding $100bn for the fifth consecutive year, companies are most concerned about physical damage, business interruption, and rising operational costs from extreme temperatures, water scarcity, and biodiversity loss. Managing transition risks, including complex ESG regulations and decarbonization efforts, has become a top priority. To mitigate these risks, businesses are enhancing insurance coverage, adopting sustainable practices, and investing in resilience measures such as flood barriers, green infrastructure, and emergency planning. As climate-related challenges grow, companies are increasingly focusing on long-term sustainability and operational stability.

6. Fire and explosion

Fire and explosions continue to be significant global risks for businesses, primarily due to their destructive nature and potential for prolonged operational disruptions. Despite being well understood and generally well-managed, fire remains a leading cause of business interruption and supply chain disruption, especially in industries reliant on concentrated suppliers like semiconductor chips or automotive components. It ranks as the third most feared risk for businesses, behind cyber incidents and natural catastrophes. Fire has been the most frequent cause of business interruption claims, representing over a third of the total value of such claims in recent years. Risks are heightened by the increasing use of electrification and lithium-ion batteries, with improper handling leading to a rising number of incidents. Regular fire mitigation practices and contingency planning are essential to reduce the risk and impact of fire-related disruptions.

7. Macroeconomic developments

Macroeconomic developments in 2025 are expected to continue with steady global growth, forecasted at 2.8%, driven by resilience despite challenges like geopolitical risks and rising interest rates. While the global economy remains stable, structural issues in major economies, such as China’s real estate crisis and Europe’s deindustrialization, are causing turbulence. The U.S. economy is projected to stay robust, bolstered by consumer spending, while emerging markets, especially in India and ASEAN countries, may benefit from new trade routes. However, regional disparities remain, with advanced economies likely to see high levels of business insolvencies. The construction and real estate sectors, in particular, face risks of insolvency, and major firms continue to experience significant bankruptcies, potentially leading to domino effects within supply chains.

8. Market development

Market developments in 2025 are expected to continue their steady pace, with no major stock market correction anticipated. Despite geopolitical tensions, rising interest rates, and national debt concerns, stock markets have shown resilience, driven by recovering earnings and strong fundamentals. The AI boom is expected to persist, with companies increasingly integrating AI tools, which could support equity returns of 8-10%. While government bond yields are likely to remain stable, the rise of tariff walls may impact mergers and acquisitions (M&A) in the U.S., making it more expensive for European companies to expand in the American market. This could lead to an imbalance in the M&A market, with U.S. companies setting the tone, creating competitive challenges for European firms.

9. Political risks and violence

Political risks and violence remain a top global concern, ranking in the top five for countries like France, Italy, and the UK. Despite dropping one position in the Allianz Risk Barometer, this peril continues to be a significant issue for companies, especially due to rising geopolitical tensions, including the ongoing conflict in Ukraine, tensions between China and Taiwan, and civil unrest. Companies fear the disruption caused by civil unrest, strikes, and terrorism, with the impact on supply chains, property, and employee safety being the primary concerns. Political violence, such as sabotage, is also an increasing threat, especially in sectors like oil, gas, and utilities. The risk is rising for smaller companies, which often lack the resources to mitigate the effects of such incidents. To address these threats, businesses are advised to implement comprehensive risk management strategies, including robust continuity planning, enhanced security, and close monitoring of regional political developments.

10. New technologies

New technologies, particularly artificial intelligence (AI), have emerged as a significant business risk for the first time in five years. The rapid acceleration of AI, sparked by tools like OpenAI’s ChatGPT, has led to widespread adoption, with nearly two-thirds of companies regularly using generative AI as of 2024. However, this fast-paced development is outpacing regulation and risk controls, creating a dual-edged sword of both benefits and risks. AI enhances productivity and can help mitigate risks, especially in cybersecurity, but it also raises ethical, privacy, and security concerns. Furthermore, AI’s energy demands contribute to environmental risks, with substantial computing power needed for AI tasks potentially exacerbating global emissions and power shortages. While AI can help tackle challenges like climate change, its own energy consumption might unintentionally worsen environmental issues, making it essential for businesses to manage these technological risks holistically.

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