Artificial intelligence has gone from a peripheral concern to one of the most pressing business risks in the space of a single year.
According to the Allianz Risk Barometer for 2026, AI has surged from tenth place in last year’s rankings to second globally – the biggest single-year jump recorded in the survey’s 15-year history – underscoring how rapidly the technology is reshaping corporate risk landscapes.
For South African businesses, the speed of this shift is particularly significant. Although AI promises efficiency gains, innovation, and competitiveness, it is emerging at a time when companies are already contending with cyber threats, regulatory complexity, infrastructure constraints, and rising financial pressure. The Barometer’s findings suggest that AI is no longer a future risk to be monitored, but a present and accelerating challenge that demands immediate governance, investment, and strategic attention.
“AI is the big mover in the Allianz Risk Barometer 2026,” explains Michael Bruch, global head of risk consulting advisory services at Allianz Commercial. “Its rapid evolution and adoption are reshaping the risk landscape, making it a standout risk for businesses worldwide.”
A risk that appeared almost overnight
AI’s rapid ascent reflects both the pace of technological development and the speed with which it has been adopted across industries. Since the launch of ChatGPT in late 2022, AI-driven tools and automation have moved swiftly from experimentation into everyday business use, with applications ranging from customer service and underwriting to fraud detection, content generation, and decision support.
In the Barometer, AI ranks second across the Americas, Asia Pacific, and Africa and the Middle East, and third in Europe. It has moved into the top three risks for companies of all sizes – large, mid-sized, and small – highlighting how broadly its impact is being felt.
Allianz notes that AI’s rise is driven not only by its operational risks, but also by its wider societal, political, and economic implications. AI is closely intertwined with cyber risk, which remains the top global threat, and intersects with other major concerns such as regulatory change, political risk, macro-economic uncertainty, and market developments.
“Companies increasingly see AI not only as a powerful strategic opportunity, but also as a complex source of operational, legal, and reputational risk,” says Ludovic Subran, chief economist at Allianz. “In many cases, adoption is moving faster than governance, regulation, and workforce readiness can keep up – pushing AI into the top tier of global risks for the first time.”
Ambition racing ahead of readiness
Despite strong interest in AI, most organisations remain in the early stages of adoption. Allianz reports that many companies are still operating in pilot or experimentation mode, with only a small group beginning to scale AI across their operations. This gap between ambition and readiness is itself emerging as a risk.
As firms attempt to move from pilots to enterprise-wide deployment in 2026, Allianz warns they will face greater exposure to system reliability issues, data-quality constraints, integration challenges, and shortages of AI-skilled talent. At the same time, remaining stuck in pilot mode carries its own dangers as expectations and investment rise without delivering meaningful business value.
New liability exposures are also coming into focus. These include risks linked to automated decision-making, biased or discriminatory models, intellectual property misuse, and uncertainty over accountability when AI-generated outputs cause harm. Nearly half of respondents say the investment required to manage AI- and cyber-related risks is “moderate”, while a further 43% describe it as “high”, pointing to the growing operational burden associated with AI adoption.
Concerns around misinformation and disinformation are intensifying as well. Advances in generative AI have dramatically lowered the cost and increased the sophistication of deepfakes, synthetic media, and automated persuasion, raising risks for political stability, consumer trust, brand integrity, and even financial-market behaviour.
“What was once a niche technical concern has now become a mainstream business and societal challenge,” says Subran, pointing to the potential for co-ordinated AI-enabled information attacks.
Operational, legal, and reputational exposure
Across the Allianz survey, respondents consistently identify three broad categories of AI-related risk.
Operational risks include business interruption, failed or misaligned systems, and errors cascading through automated workflows.
Legal and compliance risks stem from breaches of emerging AI regulations, liability for harmful outcomes and sanctions under evolving governance frameworks.
Reputational risks arise from unethical AI use, misinformation, data breaches, or biased decisions affecting customers or employees.
These concerns resonate strongly in South Africa’s financial sector, where automated decision-making, data-intensive processes, and regulatory scrutiny are already tightly intertwined. The Barometer shows that AI has entered South Africa’s top three business risks for the first time, reflecting growing awareness of both its potential and its pitfalls.
Looking ahead, organisations identify AI governance and compliance as the most urgent ESG-related technology priority for 2026, followed closely by strengthening cyber resilience and preparing for expanding disclosure and regulatory requirements around automated decision-making.
To manage these risks, companies are focusing on upgrading AI governance frameworks, investing in employee training and responsible AI practices, and developing contingency plans for AI-related failures or misuse.
Workforce disruption and skills pressure
The impact of AI on the workforce is emerging as a central concern. According to Allianz Risk Barometer respondents, nearly half of companies are investing in education, retraining, and upskilling initiatives to mitigate the effects of increased automation. Others are reshaping roles to emphasise adaptability and collaborative problem-solving or replacing low-skilled roles with more specialised positions.
Denise de Bilio, innovation and transformation leader at Allianz Commercial, notes that success with AI depends as much on people as technology.
“AI brings multiple challenges, including workforce skills and readiness gaps required to operate and maintain automated systems, and to use them to deliver superior business outcomes and customer value,” she says. “The businesses who will succeed with AI will be those that excel at bringing the technology, people, and processes together.”
Smaller firms face steeper hurdles
Although AI poses challenges for companies of all sizes, Allianz warns that smaller and mid-sized businesses may struggle disproportionately. These firms typically have fewer resources to invest in governance, skills development, and risk management, even as AI-driven tools become embedded in everyday business processes.
“AI’s benefits are also accompanied by operational, workforce, governance, ethical, and reputational risks,” says Bruch. “While larger companies will have the resources and governance to manage these risks and capture the opportunities, smaller and mid-sized companies will find it more challenging.”
At the same time, Allianz emphasises that the gap is not inevitable. With the right support, insurers, advisers, and technology partners can help smaller firms adopt AI more safely and responsibly.
“Cyber and AI are clearly a big issue for our clients, large and small,” says Rishi Baviskar, global head of cyber risk consulting at Allianz Commercial. “Smaller and mid-sized companies have limited resources to invest in resilience, but insurers are able to help bridge this gap with products and services.”
Emerging technologies accelerate the next wave of risk
The rapid rise of AI in the Allianz Risk Barometer is also a warning about how quickly emerging technologies can move from fringe innovation to systemic business risk. Allianz cautions that AI is not an exception, but a case study in how technological change can outpace governance, regulation, and risk preparedness.
“Technology moves at lightspeed. A year ago, AI was barely in the top 10 risks in the Allianz Risk Barometer and today it ranks second,” says Daniel Muller, the head of emerging risk trends at Allianz Commercial.
Although AI currently dominates attention, Allianz emphasises it is unlikely to be the last technology to reshape the risk landscape. Technology-driven risks can escalate rapidly, particularly when they intersect with cyber exposure, digital dependence, and regulatory complexity. Organisations are therefore urged to move beyond static risk registers and embed continuous horizon scanning, scenario analysis, and stress testing into their risk frameworks.
Quantum computing is highlighted as a prime example. Once largely theoretical, it now has the potential to undermine existing encryption standards, creating new cyber risks. Nearly a fifth of respondents identify a quantum breakthrough as a plausible “black swan” scenario within five years.
At the same time, Allianz notes that quantum computing could unlock significant commercial opportunities across finance and other data-intensive sectors, with investment expected to accelerate sharply.
“Until recently, quantum computing was largely theoretical, but it is now moving rapidly toward real-world application,” says Muller, underscoring how quickly emerging technologies can shift from concept to disruption.
