10 risks businesses are monitoring in 2025

Managing risks and anticipating new ones are the hallmark of the insurance industry and in the Allianz Risk Barometer 2025, companies are watching many of the same risks they monitored in 2024, although some have shifted in priority such as climate change and macroeconomic developments.

"What stands out in this year's Allianz Risk Barometer is the interconnectivity of the top risks," says Michael Bruch, global head of risk advisory services for Allianz Commercial in the report.  "A change in one – or indeed a mitigating action – might have a knock-on effect on another, and another. Climate change, emerging technology, regulation and geopolitical risks are increasingly intertwined, resulting in a complex network of cause and effect."

Here's a look at the top risks for 2025.

1. Cyber incidents

Cyber risks are only expected to increase, and they were identified as the top risk in eight industries: Aviation, chemicals, entertainment, financial services, media, professional services, technology and telecommunications. Cyber incidents were also the top risk cited across Europe, North and South America, Africa and the Middle East regions, as well as 19 countries.

2. Business interruption

For the past 10 years, business interruption has appeared as one of the top two risks in the Allianz Risk Barometer, and it is viewed as the top risk in the Asia Pacific region and 12 countries and territories. Cyber incidents and natural catastrophes provide the greatest exposures for business interruption because of their impact on supply chains. It is also cited as a top risk in 11 industries: Consumer goods, entertainment, food and beverages, heavy industry, hospitality, manufacturing, oil and gas, power and utilities, renewable energy, and transportation and logistics.

3. Natural catastrophes

Given the hurricanes and wildfires experienced on both sides of the U.S. recently, it's no surprise that natural catastrophes are a top concern for businesses. According to the report, natural catastrophes surpassed the $100 billion mark in 2024 and climbed from sixth place to third in this year's ranking. The risk extends beyond the U.S. to encompass Austria, Croatia, Greece, Hong Kong, Japan, Romania, Slovenia, Spain and Turkey as a top peril to monitor.

4. Legislation and regulation changes

Concerns about changes in legislation and regulations are universal, with a focus on sustainability reporting requirements across Europe and multiple regulatory changes proposed in the U.S. under the new administration, particularly as they relate to cryptocurrencies and artificial intelligence.

5. Climate change

Moving up two spaces in this year's report, climate change has become more of a priority as companies address the challenges associated with it. According to respondents, the top three impacts they fear are: Acute physical impacts such as those due to extreme weather or damage to production facilities; business interruption impacts, and environmental impacts resulting from extreme temperatures and other factors. To mitigate some of these impacts, companies are adopting or increasing their insurance coverage, adopting carbon-reducing business models and creating contingency plans for climate-related events.

6. Fire and explosion

For businesses, fire is one of the top three causes of business interruption behind cyber and natural catastrophe incidents. Recovering from a fire or explosion can take longer than other losses, and the impact on suppliers can be particularly difficult because of rebuilding a facility and getting production back up to previous levels. The report notes that fire has become an "elevated risk with electrification and the growing prevalence of lithium-ion batteries. Inadequate handling, storage or transportation of these batteries has been linked to an increasing number of fire incidents on land and at sea in recent years."

7. Macroeconomic developments

A more stable world economy has moved concerns about macroeconomic developments back two spots to #7, and the global economy is expected to grow by 2.8% according to Allianz Research. The U.S., China and European economies are expected to remain stable, although the impact from the latest round of proposed tariffs could affect growth for multiple countries.

8. Insolvency outlook

Insolvencies are expected to rise 4% in the U.S., 5% in Germany, 6% in Italy and 3% in China, and are expected to drop by 3% in France and 5% in the U.K. "We expect the upward curve to come to a halt, with business insolvencies stabilizing at a high level globally in 2025," explained Maxime Lemerle, lead analyst for Insolvency Research at Allianz Trade in the report.

9. Political risks and violence

For the third year in a row, concerns about political risks and violence have been in the top 10 and are a concern for companies of all sizes. Terrorism risks have increased, especially in Europe with large events like the Olympics, the Paralympic Games, large football tournaments and even Taylor Swift's concerts requiring enhanced security and risk protocols. The risk is also affecting smaller companies, which may have a reduced geographic footprint but be more severely impacted in the event of violence or interruptions to their supply chain.

10. New technologies

Artificial intelligence and other technologies can provide a host of benefits to users, but they also create some risks, which is why they round out the top 10 risks for businesses. "AI can help improve processes and productivity, but it also impacts employees and raises questions in areas like ethics, privacy and cybersecurity," says Rishi Baviskar, global head of cyber risk consulting, Allianz Commercial, in the report. "There is a balance to be found between the risks and the rewards."