Geopolitical conflict has overtaken technology shocks as the most credible trigger for a global economic disruption, with business leaders now viewing supply-chain paralysis as the likeliest “black swan” event of the next five years.
The Allianz Risk Barometer is an annual global survey of more than 3 300 risk experts across 97 countries, ranking the top business risks worldwide. In 2026, cyber incidents, artificial intelligence, business interruption, and regulatory change dominate the top ten, highlighting growing digital and operational vulnerability. Geopolitical risk, captured under political risks and violence, has risen to seventh place globally, reflecting escalating concerns about conflict, protectionism, and supply-chain disruption.
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According to the Barometer for 2026, 51% of respondents identify global supply-chain paralysis caused by a geopolitical conflict as the most plausible low-probability, high-impact scenario facing businesses. The finding reflects mounting concern that political volatility, war, and trade fragmentation are no longer distant risks but active stressors on global commerce.
The shift is significant. Although cyber risk and AI dominate the upper reaches of the rankings, Allianz’s data shows that geopolitical turmoil is rapidly reshaping the conditions under which businesses operate, trade, insure assets, and manage continuity.
Political risk climbs to record levels
Political risks and violence have climbed from ninth to seventh place globally in the Barometer, their highest ranking. Respondents attribute the rise to an increasingly volatile geopolitical environment marked by armed conflict, civil unrest, terrorism, and state-sponsored sabotage.
War perils now attract the largest share of concern within this category, with 53% of respondents identifying them as a key threat, up from 48% in 2025. Civil unrest follows closely, reflecting two years of sustained global instability, while terrorism and sabotage rank third.
Srdjan Todorovic, the global head of political violence and hostile environment solutions at Allianz Commercial, says the escalation is consistent with developments seen over the past year.
“When you look through the rearview mirror, it is easy to see why the war peril has risen to this high, as well as why the percentage of the vote has increased over the last 12 months,” he says.
The Barometer highlights 2025 as a turning point. The 12-day war between Iran and Israel, followed by United States involvement, marked a shift in the Middle East from proxy conflicts to direct state confrontation, redrawing long-standing boundaries. That escalation also set the tone for a more assertive US posture elsewhere, including Venezuela, where President Nicolás Maduro was later removed.
Beyond the Middle East, open hostilities were recorded in Africa and Asia, including clashes between Rwanda-backed M23 rebels and the Democratic Republic of Congo, tensions between India and Pakistan, and fighting involving Thailand and Cambodia. Existing conflicts in Sudan and Ethiopia intensified, while tensions between Serbia and Kosovo flared before being dampened by US intervention. At the same time, potential new flashpoints are being monitored in Mozambique and Tanzania, which, although deadly, remain relatively localised for now.
It is little surprise, Allianz notes, that business assets exposed to conflict zones have risen sharply. According to consultancy Verisk Maplecroft, assets exposed to conflict areas jumped 22% in the past year, following an almost 90% increase in areas affected by armed fighting over the past five years, which now cover close to 5% of the inhabited world.
Supply chains under strain, resilience lagging
The geopolitical backdrop has direct consequences for global supply chains. Allianz notes that 2025 saw a clear move towards protectionist trade policies, tariff wars, and regionalised conflict, all of which injected fresh uncertainty into the global economy.
Trade restrictions have tripled in the past year, affecting an estimated US$2.7 trillion in merchandise – nearly 20% of global imports – according to Allianz Trade. In response, companies are increasingly exploring friendshoring, nearshoring and regionalisation strategies. Yet resilience remains weak: only 3% of respondents describe their supply chains as “very resilient”.
This fragility helps explain why business interruption continues to rank among the top global risks. Although it slips one place year-on-year to third, 29% of respondents still identify it as a primary concern, closely tied to geopolitical instability and regulatory disruption.
Changes in legislation and regulation, including tariffs and trade controls, remain entrenched at fourth place globally, with a growing number of respondents citing protectionism as a key driver of risk.
From war zones to critical infrastructure
Beyond open conflict, Allianz points to a sharp rise in terrorism and, in particular, sabotage over the past 12 to 18 months. Alongside tragic attacks on Jewish communities in Manchester in the United Kingdom and at Bondi Beach in Australia, Europe has seen a surge in so-called grey-zone sabotage attacks – hostile actions that fall short of open warfare.
Associated Press reporting cited in the Barometer recorded 145 such incidents across Europe alone, many attributed to Russian state-sponsored actors seeking to undermine governments and public confidence. While most incidents caused limited physical damage, they prompted a major reallocation of security resources. Poland, for example, deployed 10 000 troops to protect key infrastructure, while NATO and European partners increased spending to secure maritime routes and offshore assets such as energy facilities and telecommunications cables.
“This is before you factor in how much time and money has already been spent in the private sector on enhancing physical and cyber security at their own sites,” says Todorovic.
The threat landscape is also evolving. Early 2026 saw German left-wing militants protesting over climate change and AI claim responsibility for an arson attack that cut power to tens of thousands of households in Berlin. The incident followed a series of power sabotage attacks in Germany, raising concerns about more extreme forms of environmental activism amid perceived slow political progress and the rolling back of net-zero targets.
“Shifting global alliances and economic realignment, war in Ukraine, tariff wars, rising xenophobia and anti-immigration protests in Europe, decreasing trust in governments, and the deepening economic crisis globally – it is not hard to see why political risk and violence perils have risen sharply over the last 12 months and are front of mind for risk industry professionals,” says Todorovic.
Implications for South Africa and financial services
For South Africa, the findings underscore the country’s exposure to external shocks despite its geographic distance from major conflict zones. As a trade-dependent economy integrated into global supply chains, disruptions driven by geopolitical conflict can quickly translate into higher costs, delayed inputs, market volatility and insurance and financing pressures.
Financial institutions, insurers and asset managers face particular challenges. Supply-chain paralysis can amplify credit risk, trigger business interruption claims, disrupt investment flows, and heighten operational and liquidity risks across portfolios. Political violence and unrest also complicate underwriting, pricing, and capital-allocation decisions, especially for businesses operating across borders.
Preparing for the plausible, not just the probable
Allianz argues that the rise of geopolitical risk highlights the need for more integrated and forward-looking resilience strategies. As risks become more interconnected, companies are being urged to move beyond static risk assessments toward dynamic horizon scanning, scenario modelling, and rigorous stress testing.
Integrated resilience approaches can help organisations adapt supply chains and operations without creating unintended vulnerabilities, particularly as they balance geopolitical pressures with sustainability and regulatory demands. The report also notes that advanced analytics and AI tools can support this transition by improving risk visibility and decision-making.
Businesses are being warned to plan for disruption as a realistic baseline rather than an outlier.
As Todorovic puts it: “Businesses need to hope for the best but make sure they are prepared for the worst.”
