From fires and cyberattacks to extreme weather, infrastructure failures, and transport losses, South African businesses are facing a risk environment that is becoming more volatile, more interconnected, and more expensive to insure.
According to PSG Insure, these exposures emerged as the most significant risks across the local short-term insurance landscape during the year, reflecting both entrenched vulnerabilities and rapidly evolving threats that are reshaping claims experience and risk management priorities heading into 2026.
These risks closely mirror those identified globally in the Allianz Risk Barometer 2026 – underscoring that South Africa’s risk profile is being influenced by the same global forces affecting businesses worldwide.
Reviewing the year’s claims experience offers critical lessons for insurers, advisers, and businesses as they plan for 2026.
Fire: a persistent and costly disruptor
Fires remained one of the most financially damaging risks for South African businesses in 2025, often triggering extended operational shutdowns, long-term business interruption, and costly asset replacement, says Ryno de Kock, the head of distribution at PSG Insure.
Locally, many incidents were linked to electrical faults, ageing wiring, overloaded systems, inadequate maintenance of fire-suppression equipment, and non-compliance with safety regulations. The risk is particularly acute in industrial, manufacturing, and storage environments.
Globally, fire continues to feature prominently as a driver of business interruption. The Allianz Risk Barometer notes that although fire risks are generally well understood and actively managed, they remain the most frequent cause of large BI claims. Allianz Commercial analysis of more than 1 000 BI claims over five years shows fire accounts for more than a third of the total claim value.
Recovery can be slow and complex, particularly in sectors dealing with flammable materials or concentrated supply chains. The Barometer also flags electrification and the growing use of lithium-ion batteries as emerging fire risks, with inadequate storage and handling increasingly linked to incidents on land and at sea.
Cyber risk accelerates, especially for SMEs
Cybercrime continues to pose a growing threat to South African businesses, with email compromise, ransomware, and phishing attacks among the most reported incidents.
Small and medium-sized enterprises are particularly vulnerable, often lacking formal cyber-security frameworks or relying on outdated systems.
“This underscores the need for multi-layered cyber risk management, including strong authentication controls, regular software patching, and employee training,” says De Kock.
The Barometer reinforces the urgency. Cyber incidents ranked as the top global business risk for the fifth consecutive year, with 42% of respondents identifying it as their primary concern. It is the number one risk across all regions and company sizes.
Read: Global risks are landing closer to home for SA businesses
“Large companies’ investments in cyber security and resilience have been paying off,” says Rishi Baviskar, the global head of cyber risk consulting at Allianz Commercial. “However, cyber risk continues to evolve.”
Artificial intelligence, increased reliance on third-party providers, and expanding digital attack surfaces are accelerating exposure.
Read: AI vaults from fringe concern to top-tier business risk
About 90% of respondents anticipate moderate to high investment in cyber loss prevention in the year ahead.
Climate and extreme weather reshape claims patterns
South Africa experienced another year of unpredictable and severe weather in 2025, including flooding, strong winds, and storm damage, with the retail, agriculture, and manufacturing sectors particularly affected.
Insurers are increasingly turning to data-driven tools, such as geocoding, to assess exposure, mapping properties against climate models and weather-risk patterns to identify areas of heightened future loss.
Although natural catastrophes slipped slightly in the Allianz Risk Barometer rankings, Allianz cautions this change masks a far more complex reality. Insured losses from natural catastrophes are expected to reach US$107 billion in 2025, marking the sixth consecutive year above US$100bn.
“This year’s Allianz Risk Barometer suggests some businesses are overlooking long-term risks like climate change,” says Mabé Villar-Vega, senior catastrophe risk research analyst at Allianz Commercial. “But the lower-than-average losses for natural catastrophe in 2025 are no reason to diminish the importance of the risks it presents.”
Secondary perils such as flooding, wildfires, and severe storms are now generating losses comparable to traditional peak risks, a shift that insurers and reinsurers are being forced to factor into capital planning and underwriting strategies.
Infrastructure degradation adds to loss severity
Ageing infrastructure remains a significant contributor to insured losses in South Africa, from burst municipal pipes and water damage to power instability and grid-related faults.
These failures often have knock-on effects, increasing fire risk, damaging equipment, and disrupting operations. Advisers play a critical role in helping clients understand how exclusions related to wear and tear, poor maintenance, and grid failure apply, and what steps can be taken to mitigate predictable losses.
Globally, critical infrastructure failure ranks 11th on the Allianz Risk Barometer. In South Africa, it places much higher – sixth – reflecting the country’s heightened exposure to power and municipal system failures.
Transport and fleet risks remain elevated
Vehicle- and transport-related losses continue to weigh heavily on the claims environment. Accidents, cargo theft, hijackings, and opportunistic crime targeting logistics vehicles remain prevalent, particularly for businesses dependent on delivery fleets.
PSG Insure notes that businesses investing in telematics, driver-monitoring systems, and structured fleet-management programmes generally experienced smoother claims outcomes and gained better visibility into their risk exposure.
Advisers remain central to resilience
Across all risk categories, one message remains consistent: proactive risk management and informed advice make a measurable difference.
“No matter the risk, working closely with an adviser remains one of the most effective ways to navigate the evolving landscape,” says De Kock. “Advisers can assess changing exposures, explain policy updates, and help tailor solutions that keep businesses resilient in 2026 and beyond.”
