Cyber Threats Surge as Top Business Risk in 2025: Climate Change Climbs in Allianz Risk Barometer

The latest Allianz Risk Barometer has revealed that cyber risks remain the dominant threat to businesses globally in 2025, with data breaches, ransomware attacks, and IT outages topping the list. For the fourth consecutive year, cyber threats have outpaced other concerns, driven by the rising sophistication of attacks and the increasing reliance on technology.

While cyber risks remain at the forefront, business interruption (BI) ranks second, followed closely by natural catastrophes, which continue to impact businesses across regions. Meanwhile, climate change has surged to its highest position in the report’s 14-year history, marking a growing recognition of its importance as a global business risk.

Here’s a breakdown of the key findings and why these threats should be on every business’s radar in 2025.

Cyber Risks Remain the Biggest Threat to Businesses

Cybersecurity remains a critical concern for organizations worldwide, with 38% of respondents in the Allianz Risk Barometer naming it as the top risk for 2025. As the CrowdStrike incident of 2024 demonstrated, companies are becoming more vulnerable to cyberattacks, which can compromise sensitive data and disrupt business operations.

Rishi Baviskar, Global Head of Cyber Risk Consulting at Allianz Commercial, emphasized that the growing reliance on technology and the accelerated adoption of artificial intelligence (AI) are exacerbating these risks. As businesses continue to integrate more advanced digital solutions, cybersecurity becomes an even more pressing issue.

Business Interruption: The Ripple Effect of Cyber and Natural Disasters

In the second spot, business interruption (BI) remains a constant challenge, with 31% of respondents acknowledging it as a major concern. BI risks are often a direct result of other disruptions, such as cyberattacks, natural disasters, or supply chain issues.

The collapse of the Francis Scott Key Bridge in Baltimore and disruptions in the Red Sea shipping lanes due to geopolitical tensions in 2024 are just a few examples that underline the interconnectedness of these risks. Michael Bruch, Global Head of Risk Advisory Services at Allianz Commercial, stressed the importance of resilience in navigating these complex challenges.

Natural Catastrophes and Their Growing Impact

With extreme weather events becoming more frequent, natural catastrophes ranked as the third-largest business risk. In 2024, major incidents such as hurricanes, floods, and droughts caused significant disruptions globally. For the fifth consecutive year, insured losses from natural disasters exceeded US$100 billion. Businesses in regions like Australia continue to grapple with the aftermath of disasters like flooding and bushfires, highlighting the ongoing need for improved disaster preparedness.

Climate Change Climbs to Fifth Place: A Growing Concern

Climate change has risen to fifth place in the Allianz Risk Barometer, reflecting a sharp increase in its impact on business risk. The growing severity and frequency of climate-related risks such as floods, droughts, and wildfires are pushing companies to adapt and implement sustainable practices. As regulatory pressures around climate reporting and sustainability intensify, businesses must prioritize climate resilience to protect their operations.

Vanessa Maxwell, Chief Underwriting Officer at Allianz Commercial, pointed out the interconnectedness of climate risks with other challenges, such as evolving regulations and emerging technologies. Addressing these risks requires a holistic approach to risk management, where businesses adopt strategies to mitigate and adapt to climate change.

Rising Regulatory and Legislative Challenges

Regulatory and legislative changes are also causing increasing concern, particularly around areas like privacy, industrial relations, and climate reporting. The Allianz Risk Barometer ranked this as the fourth largest business threat, with Australia seeing regulatory concerns climb to second place. The push for stronger compliance with ransom attack laws and environmental disclosure requirements is putting pressure on businesses to stay ahead of changing legislation.

Geopolitical Risks: Trade Wars and Protectionism

While geopolitical risks ranked ninth overall, they remain a significant issue for large organizations. Rising export restrictions and tariffs are increasing costs for businesses, particularly in industries dependent on global supply chains. Allianz’s Ludovic Subran highlighted that the uncertainty around trade policies and protectionism is leading to a rise in operational costs, further exacerbating business risks.

Smaller Businesses Also Face Greater Risks in 2025

While larger organizations continue to deal with major challenges like cybersecurity and business interruption, smaller businesses are increasingly exposed to risks that were once more prevalent among larger companies. Climate change and geopolitical tensions are now rising on the radar for small and medium-sized enterprises (SMEs), though local challenges like labour shortages and economic uncertainty remain their primary concerns.

Preparing for the Business Risks of 2025

As we move into 2025, it is clear that cybersecurity, business interruption, and natural disasters will remain at the top of the business risk agenda. However, the rising threat of climate change and increasing regulatory pressures are reshaping the landscape, demanding that companies adopt sustainable and resilient strategies to safeguard their future.

CEOs and business leaders must be proactive in risk management, ensuring they invest in technologies, strategies, and partnerships that will allow them to weather the growing storm of global challenges. By embracing innovation, sustainability, and collaboration, businesses can better navigate the complex risks of 2025 and beyond.

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