Cyber incidents rank as the top business risk globally by a clear margin and across all company sizes for the year ahead, according to the 2024 Allianz Risk Barometer released Tuesday.

Thirty-six percent of respondents to Allianz’s survey ranked the cyber peril of greatest concern, five percentage points above No. 2-ranked business interruption.

Cyber threats are constantly evolving as hackers gain access to new technologies or find new ways to exploit old vulnerabilities, Allianz said in the report.

“Hackers are beginning to use artificial intelligence (AI) powered language models to increase the speed and scope of ransomware attacks, as well as create new malware and produce highly convincing phishing emails and deep fakes. Such attacks are likely to proliferate during 2024,” the report said.

It was the third consecutive year that cyber incidents and business interruption ranked in first or second place. Cyber incidents also ranked as the top corporate risk in the U.S., Allianz said.

The more traditional threats posed by natural catastrophes and fire and explosion climbed back up the rankings, according to the survey of 3,069 customers, brokers, and Allianz risk management experts from 92 countries and territories, whom the insurer questioned during October and November 2023.

Forty-four percent of respondents (1,340) work for companies with more than $500 million in annual revenue; 26% (792) for companies with $100 million to $500 million in annual revenue; and 30% (937) for companies with less than $100 million in annual revenue.

Natural catastrophes rose to third place globally from sixth place in the survey, while fire and explosion, which most frequently drive business interruption, rose to sixth from ninth, Allianz said. Natural catastrophes move up to third from fifth in the U.S., following a record loss from thunderstorms.

“Changes in legislation and regulation” moved up to fourth globally from fifth, while political risks and violence rose again to eighth from 10th with more volatility and unrest expected this year.

The geopolitical environment continues to be uncertain and volatile and an increasingly relevant source of risk for supply chains and international trade, Allianz said.

The recent disruption in the Red Sea – a vital trade route between Europe and Asia – due to Houthi rebel attacks on vessels is the latest risk to supply chains, the report said.

This is also an election year when up to 50% of the world’s population could go to the polls, increasing the risk of election-related civil unrest. Terrorism in Western Europe and North America is also an increasing threat, Allianz said.

Meanwhile, macroeconomic developments slipped to five from three, while shortage of skilled workforce fell to 10th from eighth globally. Climate change held its seventh spot in the ranking.

Market developments, such as intensified competition, new entrants, and mergers and acquisitions, was a new entry in the top 10 global risks, placing in ninth position.

The energy crisis, pandemic outbreak and economic risks fell down the list of company concerns as Covid-19-related issues abated.