By Thomas Varney, Regional Manager, North America, Allianz Risk Consulting, Allianz Commercial
Global insurer Allianz Commercial recently released its annual Risk Barometer for 2025 detailing the top risks companies are considering and preparing for in the year ahead. The report integrates perspectives from 3,778 risk management experts, including CEOs, risk managers, brokers, and insurance professionals across 106 countries and territories. Following a year of widespread destruction caused by extreme weather events, it is no surprise that natural catastrophes rank among the top concerns for this year’s respondents.
Behind cyber risk and business interruption, natural catastrophes ranked as the third top risk globally and across sectors, with 29% percent of respondents citing the risk as significant. This is the category’s second consecutive year at this rank after rising from the sixth spot from 2023 to 2024. More respondents also chose the category as a top risk year-on-year, growing from 26% to 29%.
2024 Perils Point Toward 2025 Risk
2024 was yet another year of devastating natural disasters across the globe, with Gallagher Re reporting that at least one historically anomalous extreme weather or climate event impacted every major continent over the past year. In North America, extreme hurricanes and convective storms like those that ravaged Florida and the Appalachian region this past fall caused widespread damage to both individuals and businesses. Meanwhile, Europe and Asia saw massive flood events, and severe drought impacted the African region.
As a result, insured losses related to natural catastrophes alone surpassed $100 billion for the fifth year in a row, and total economic losses reached $310 billion, according to Swiss Re. Top among the most destructive weather events were severe convective storms (SCS), tropical cyclones, and floods, which together accounted for nearly 90% of global insured losses relating to natural perils in 2024.
Increased natural disasters and major weather events will continue to impact global communities and businesses in the years ahead, and this year’s results show that companies are taking note.
Natural Catastrophes Interlinked with Other Business Risks
Awareness surrounding the risks posed by natural catastrophes were reflected not only by the category’s rank in the top three, but also by other related risks highlighted in the 2025 Risk Barometer.
With experts projecting that 2024 was the hottest year on record, climate change – a category closely related to natural catastrophes – reached its highest-ever ranking on this year’s barometer, moving up two spots to #5. Respondents also reported that physical damage and operational interruptions are the most threatening to their companies, both of which are potential results of climate-related extreme weather events. As companies take steps to address climate risk, it will necessitate taking measures to prepare for consequent natural catastrophes spurred or strengthened by global warming.
Additionally, natural catastrophes’ potential to harm global supply chains and company facilities links to another high-ranking category this year: business interruption (BI). BI, referring to events such as natural disasters or cyber-attacks that pose issues for normal business operations, ranked #2 overall.
Region and Industry Influencing Nat Cat Risk
The barometer yielded interesting results across regions and specific countries regarding natural catastrophes. In Europe, for example, the category rose from third to second this year, garnering 33% of responses compared to 25% in 2024. Similarly, responses for the category grew from 29% to 34% for the Americas to reach the top two. This peril was particularly elevated for many coastal and island countries and territories, highlighting the heightened likelihood and impact of extreme weather events for these regions. For example, natural catastrophes were the top-ranked risk in Croatia, Greece, Turkey, Hong Kong, and Japan.
Along with region, sector played a role in respondents’ likelihood to rank natural catastrophes highly amongst 2025 business risks. The category was #1 for the shipping, construction, and retail industries, another link to the threat extreme weather poses to supply chains and infrastructure. Respondents from the agriculture, manufacturing, and power/utilities industries ranked natural catastrophes second.
Mitigation Efforts as a Necessity
As the effects of climate change become more widespread and acute as time progresses, extreme weather events are expected to grow more frequent and severe globally, impacting more and more companies across region and industry. As such, having clear, effective plans in place to respond to natural catastrophes is not just important for businesses, but essential.
Along with developing proper methods to react and respond to these disasters, it is crucial that companies invest in resilience measures to mitigate global warming, prioritizing proactive initiatives alongside reactive efforts to address this key risk.
To read the full 2025 Allianz Risk Barometer, please visit: https://commercial.allianz.com/news-and-insights/reports/allianz-risk-barometer.html
