Cyber tops business risks as AI surges in Asia

SINGAPORE — Cybersecurity remains the top business risk in Asia Pacific, while artificial intelligence (AI) has surged into the second spot, according to the Allianz Risk Barometer 2026 released on January 14. The report, published annually by Allianz Commercial, highlights growing concerns over digital threats, operational disruptions, and evolving technological risks amid a volatile geopolitical landscape.

The findings are based on insights from more than 3,000 risk management professionals across 92 countries and territories, including CEOs, risk consultants, underwriters, brokers, and insurance experts.

Cyber incidents were identified as the leading threat by 36% of respondents in Asia Pacific, maintaining the top rank for companies of all sizes. This mirrors the global trend, where cyber ranked as the No. 1 risk for the fifth consecutive year, with its highest-ever score of 42% — a 10-point increase from the previous year.

In Asia Pacific, the region most affected by cyberattacks in 2024, incidents rose by 13% year-on-year and accounted for 34% of global cyber incidents. Key markets such as Australia, Hong Kong, India, Japan, Singapore, South Korea, and Thailand listed cyber as a top-three concern.

Despite improvements in cyber resilience and growing interest in cyber risk transfer solutions, many large companies in Asia remain underinsured compared to their Western counterparts. A significant portion of businesses in the region continue to self-insure against cyber risks.

“Following the volatility and uncertainty of 2025, businesses continue to face interconnected and highly complex risks in 2026’s fast-changing environment,” said Allianz Commercial CEO Thomas Lillelund. “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.”

AI: Rapid rise and rising concerns

AI is the biggest riser in the 2026 barometer, jumping from No. 9 to No. 2 in Asia Pacific, where 32% of respondents cited it as a top risk. It has entered the top three concerns in countries like Australia, China, Hong Kong, India, Malaysia, and Singapore — all of which rank in the top half globally for AI readiness.

More than 90% of companies in Asia plan to scale up their use of generative AI within the next two years, with the primary goals of reducing operational costs and boosting revenue. However, businesses are increasingly aware of the potential liabilities associated with AI integration, including legal, operational, and reputational risks.

Globally, AI has made the largest leap in the rankings — rising to No. 2 from No. 10 in 2025. It is now a top-three concern in all regions, including the Americas, Europe, Africa, and the Middle East. The concern spans all business sizes, from multinationals to small and medium enterprises.

“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 report noted.

“The evolving risk landscape, particularly in the areas of cyber threats and the adoption of AI, pose new challenges to businesses in the region,” said Christian Sandric, Allianz Commercial president for Asia Pacific. “With Asian economies playing a pivotal role in global and regional trade, the potential for business interruption also remains a significant concern. This volatile environment stresses the importance of resilience in a business’ supply chain, response measures, and risk management strategies to withstand and recover from disruptions.”

Business interruption tied to global volatility

Business interruption (BI) remains a major concern, though it slipped to No. 3 in the Asia Pacific rankings for the first time in five years. The risk is closely linked to supply chain fragility, geopolitical tensions, and natural catastrophes.

BI ranked in the top three in China, India, Japan, Malaysia, the Philippines, Singapore, and South Korea. It was cited as a concern by 29% of global respondents, placing it third overall worldwide.

The related risk of regulatory or legislative changes, including trade tariffs and restrictions, held steady at No. 4 (25%) in Asia Pacific. The report highlighted the rising tide of protectionism and the formation of trade alliances that are reshaping global commerce.

In 2025 alone, trade restrictions tripled, affecting an estimated USD 2.7 trillion worth of goods — nearly 20% of global imports — according to Allianz Trade. These pressures are encouraging companies to explore supply chain trends like “friendshoring” and regionalization, particularly in emerging trade hubs like Vietnam, Malaysia, and Thailand.

However, only 3% of respondents consider their supply chains “very resilient,” underscoring the vulnerability businesses continue to face amid shifting trade dynamics.

Natural disasters and climate change amplify risks

Natural catastrophes ranked fifth (22%) in Asia Pacific and remain a key concern in Japan, Malaysia, the Philippines, and Thailand. The region endured multiple disasters in 2025, including the Myanmar earthquake, Typhoons Matmo, Ragasa, and Bualoi, Cyclone Alfred, wildfires in South Korea, and widespread flooding in Malaysia and Thailand.

The late arrival of the tropical cyclone season led to increased flooding and landslides across Southeast Asia, resulting in significant human and economic losses. The region continues to face a high insurance gap — more than 80% — leaving many vulnerable populations without financial protection after major disasters.

There is also mounting evidence that tropical cyclones are becoming more intense due to climate change, which held its position at No. 6 (19%) in the 2026 risk rankings.

Research shows rising ocean temperatures are fueling more powerful and destructive weather events, placing additional strain on regional governments and insurers.

A complex web of emerging and traditional risks

The 2026 Allianz Risk Barometer paints a picture of a business environment shaped by rapid technological change, persistent cyber threats, climate-related disasters, and geopolitical instability. These interconnected risks are forcing organizations to rethink traditional approaches to risk management.

Allianz noted that as companies adopt technologies like AI and deepen their reliance on digital infrastructure, the potential for cascading risks increases.

“Risk managers must now navigate a highly dynamic risk landscape where threats are not only evolving quickly but are also increasingly interlinked,” the report concluded.

The findings call for enhanced resilience measures, from building stronger supply chains to bolstering cyber defenses and implementing responsible AI governance.

With AI and cyber risks leading the charge, businesses in Asia Pacific are being urged to stay ahead of the curve — not just in innovation, but also in preparation.