Allianz Commercial’s latest Risk Barometer surveyed 3,778 risk management experts from 106 countries and territories to identify the top concerns for businesses in the year ahead. The annual survey incorporates the responses of risk consultants, underwriters, senior managers, and claims experts, as well as other risk management professionals.

The Risk Barometer also includes responses from Manufacturing risk experts across the globe. Below are the top business risks they identified for Manufacturing in 2025.

Business Interruption and Supply Chain Disruption

Business Interruption (BI) continues to be the #1 concern for the Manufacturing industry, with 41% of Manufacturing respondents ranking BI as their top concern. Closely aligned with many of the other top risks in the Allianz Risk Barometer, BI is typically a consequence of events like a natural disaster, a cyber attack or outage, insolvency or political risks like conflict or civil unrest.

There were several large supply chain disruption events in 2024, including the CrowdStrike IT outage in July, one of the largest to date. A faulty update to CrowdStrike’s security software affected computers running Microsoft Windows, reportedly costing Fortune 500 companies over US$5.4bn, with insured losses of $540mn to $1bn.

With the increasing reliance on technology companies for IT infrastructure, software, and services, the trend of disruptive events with global effects will continue to rise. These supply chain disruptions cause severe economic damages, ranging up to 5% to 10% of product costs and additional downtime impacts.

The top three important actions companies are taking to de-risk their supply chains and make them more resilient, according to Risk Barometer respondents are:

• Developing alternative/multiple suppliers
• Broadening geographical diversification of supplier networks in response to geopolitical trends
• Initiating/improving business continuity management

Natural Catastrophes

Natural Catastrophes remained the second highest risk for Manufacturing for 35% of industry respondents, up from 34% in 2024. Natural catastrophes encompass storms, floods, earthquakes, wildfire, and extreme weather events.

An above-average hurricane season that featured events like Helene and Milton in the US, Storm Boris in Europe, widespread flooding in several countries and the Noto Peninsula Earthquake in Japan serve as reminders that natural catastrophes are a major threat for companies around the world and the insurance industry.

Total economic losses from natural catastrophes alone reached $310bn in 2024, according to Swiss Re. Severe convective storms (SCS), tropical cyclones and flooding events accounted for almost 90% of all global insured losses related to natural perils and 85% of the total economic losses associated with natural hazards. SCS was the costliest peril, with $57bn, $51bn of which occurred in the US alone. This is the second consecutive year that SCS losses in the US have surpassed the $50bn threshold.

2024 was the warmest year on record, marking the first-time global temperatures exceed 1.5°C above pre-industrial levels (1850-1900). Weather and climate events accounted for at least 95% of the insured losses in the first three quarters of 2024, with $103bn. Moreover, every major continent experienced at least one historically anomalous extreme weather or climate event during this year.

Cyber Incidents

Cyber incidents, including cyber crime, IT network and service disruptions, malware / ransomware, data breaches, fines, and penalties, remained in the third spot for 33% of global Manufacturing respondents, up from 32% in 2024.

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. 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.

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.

Fire and Explosion

Few things can be more destructive than a fire. Not only can fire cause costly damage, but it can also interrupt a firm’s operations indefinitely, ensuring it is a perennial top 10 global risk for businesses. Fire remains the fourth most important risk at 25% for Manufacturing businesses in 2025.

Fire risks are well understood by businesses and typically well risk managed. However, fire remains a significant cause of BI and supply chain disruption, especially where critical components such as semiconductor chips or automotive components are concentrated geographically or are among a small number of suppliers.

The degree of disruption can be very high, as it can take longer to recover from than many other perils, and the impact on suppliers can often be great. Fire has also 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.

Regularly assessing and updating prudent fire mitigation practices, including preventative measures, fire extinguishing methods and contingency planning remain essential for all businesses to lower the risk of loss from any incident.

Changes in Legislation and Regulation

A new risk on the Risk Barometer rankings for Manufacturing businesses this year at number five with 20% of respondents is Changes in Legislation and Regulation, including new directives, protectionism, environmental, social, and governance, and sustainability requirements.

2025 will be the year of de-bureaucratization. At least if the announcements of the new governments on both sides of the Atlantic are to be believed. Sustainability reporting requirements are high on the agenda in Europe, while in the US there is a risk of a ‘regulatory Wild West’ if grandiose announcements are followed by action, particularly with crypto and AI. History has shown that crypto is highly susceptible to money laundering and financial crime. This justifies strict regulations and monitoring.

The same applies to AI. As a general-purpose technology, AI can help to take productivity to a new level – for better or for worse. The spread of fake news on social media is just one (dangerous) example. Developing and applying AI without guardrails does not seem like a good idea.

The bottom line: deregulation is a good idea in principle – but the devil is in the details. Not every regulation is inherently ‘bad’. And more often than not it is the implementation of rules that make corporate life difficult. Not only the number of rules but also an efficient administration that makes compliance as easy as possible should be the focus.

To view the full 2025 Allianz Risk Barometer, please visit: https://commercial.allianz.com/news-and-insights/reports/allianz-risk-barometer.html