Australian businesses say data breaches, ransomware attacks and other cyber incidents are their biggest concern this year, according to an Allianz global risk survey.

Cyber incidents top the list for the second straight year, with 56% of survey respondents naming it the number one threat.

Changes in legislation and regulation place second at 45%, up three spots from last year, while natural catastrophes drop one spot to third on 28%.

Business interruptions and a shortage of skilled workers share fourth spot on 21%. Climate change (20%), fire and explosions (13%), new technologies (12%), macroeconomic developments such as inflation (11%) and market developments (10%) round up the top 10.

Allianz Australia’s chief GM of commercial Phuong Ly says cyber’s ranking is “being impacted by continued high-profile data breaches such as Optus, Medicare and the CrowdStrike incident. With the increasing frequency and sophistication of cyber threats, it’s crucial for businesses to take a proactive approach to their cybersecurity and ensure they have adequate insurance cover in place.”

On the heightened concern over regulatory change, Mr Ly says the “growing complexity around compliance has made navigating the regulatory landscape more challenging” for Australian businesses.

Globally, cyber tops the Allianz Risk Barometer for the fourth straight year: 38% of respondents list it as the biggest threat.

Business interruption is second, followed by natural catastrophes, changes in legislation and regulation, and climate change.

Fire and explosions rank sixth, followed by macroeconomic developments, market developments, political risk and violence, and new technology.

Allianz says the risk from new technology such as artificial intelligence is a new entry in this year’s global top 10. However, 50% of respondents believe AI brings more benefits than risks, compared with 15% who think the opposite.

“AI promises a myriad of benefits and improved processes and efficiencies but is also accompanied by a host of new risks, which means the new technologies risk category is back on the radar of many companies after five years outside the global top 10,” the survey report says.

Click here for the report.