Allianz Risk Barometer 2025 -
Global risk #1: Cyber incidents (38%)

The past year has seen continuing ransomware attacks, which are increasingly targeting sensitive data to increase  the financial leverage on companies. Ransomware continues to be the top cause of cyber insurance loss, during the first six months of 2024, it accounted for 58% of the value of large cyber claims (>€1mn), Allianz Commercial analysis shows.

A data breach is the cyber exposure companies fear most (see graphic). “The growing significance of data breach losses among cyber insurance claims is driven by a number of notable trends,” says Michael Daum, Global Head of Cyber Claims, Allianz Commercial.

“A rise in ransomware attacks including data exfiltration is a consequence of changing attacker tactics and the growing interdependencies between organizations sharing ever more volumes of personal records. At the same time, the evolving regulatory and legal environment has brought an uptick in so-called ‘non-attack’ data privacy-related class action litigation, resulting from incidents such as wrongful collection and processing of personal data – the share of these claims has tripled in value in two years alone.”

Cyber is likely to remain a top risk for organizations going forward, given the growing reliance on technology, and as AI is incorporated into a growing number of products and services, according to Daniel Muller, Emerging Risks and Trends Manager, Allianz Commercial: “Advancements in technology, enhanced connectivity, faster network speeds, and the rise of remote work and digital commerce will continue to elevate cyber risks, such as data breaches and ransomware attacks. AI will further amplify and accelerate these threats, but it also holds the potential to enhance cyber security measures, offering a dual-edged sword inthe digital landscape. ”

Cyber also overlaps with several other highly ranked risks in the Allianz Risk Barometer. According to respondents, cyber incidents are the cause of business interruption companies fear most. It also ranks as the second biggest environmental, social, and governance (ESG) and sustainability risk of concern for companies, behind only climate change transition challenges.

With AI, a balance needs to be found between risk and reward, according to Baviskar: “Take cyber risk. AI is being used by criminals and nation states to cause disruption or spread misinformation. But it can also help mitigate risks and build resilience. AI can help improve processes and productivity, but it also impacts employees and raises questions in areas like ethics, privacy and cyber security.” 

While the application of AI can help prevent or mitigate risk, there can be unintended consequences, Bruch adds. “AI plays a crucial role in creating solutions to lower emissions and support the transition to Net Zero, such as by enhancing the efficiency of energy generation, transmission, and consumption. However, it is important to note that AI itself demands substantial computing power and energy."

“One mitigation action can create new problems, or even be counterproductive to the original goal. This is a major challenge going forward. Businesses will need to manage these risks and risk prevention measures holistically. It's essential to ensure that an AI-driven solution doesn't inadvertently increase risks, such as those related to climate change.”