AI Ranked Second Among Global Business Risks

According to Allianz, AI is a double-edged sword for companies, both helpful and dangerous at the same time. The technology has become a business risk - and not just as a tool for criminal hackers.

According to Allianz, artificial intelligence (AI) has become one of the biggest global business risks for companies. In the new "Risk Barometer" published by corporate insurer Allianz Commercial, AI has shot up from tenth to second place behind cybercrime, which has been the long-standing frontrunner.

The two are related: criminal hackers are increasingly using AI for their attacks. However, according to the Risk Barometer, the use of AI can also be dangerous for a company even without any malicious intent, for example when managers and employees make wrong decisions based on incorrect data and information.

The Three Main Risks Are Related

Business interruptions rank third among the biggest global business risks this year. There is also a connection to cyber attacks here: a common cause of business interruptions is online extortion, where hackers paralyze a company's computer systems through encryption and demand large sums of money for subsequent decryption.

Allianz Commercial is a subsidiary of the Munich-based DAX-listed group, which publishes its "Risk Barometer" annually at the beginning of the year. The assessments are based on a survey of 3,338 experts from 97 countries conducted last fall. These include executives and managers from other companies, risk and claims consultants, insurance brokers, experts from industry associations, and Allianz employees.

The respondents' answers vary from country to country, but not fundamentally: AI risks ranked fourth in Germany, second in Switzerland, and first in Austria.

AI is Both a Curse and a Blessing

AI is therefore a double-edged sword: a majority of companies see the technology as an opportunity, not least for the automated defense against malicious cyber attacks. At the same time, however, many of the experts surveyed see major dangers: AI poses an ever-increasing risk, said Michael Furtscheller, regional manager for Germany and Switzerland -"perhaps both a blessing and a curse."

AI Makes It Easier for Criminals

According to the report, cybercriminals use AI to perfect “social engineering,” posing as executives and deceiving their subordinates. "By writing highly tailored emails telling people to click or do something else, whether it's cloning or generating speech, or even faking videos", explained Michael Daum, head of cyber claims handling. "The vast majority of attacks we see still require the involvement of a human being - usually an employee - to enable the attack."

AI Poses a Double Threat to Companies from Outside and Inside

But according to Allianz managers, external attacks are only one side of the problem. Risks for companies also arise from the completely legal use of AI software by their own employees and managers. "By definition, AI works with a certain degree of autonomy, which means that the results can be incorrect or fabricated," said Allianz Commercial Manager Alexandra Braun.

"And incorrect or even discriminatory AI results can, of course, also lead to legal disputes or negative press coverage and then to a loss of reputation and image for companies." According to the report, AI-specific risks also include copyright infringements if the software copies or uses protected information.

Wide Range of Risks: From Politics to Explosions

The remaining risks in the global top ten range from politics and nature to the traditional uncertainties of business life. In fourth place are legislation and regulation, which refers to both US customs policy and other trade barriers, as well as the bureaucracy that is lamented in many countries.

The next two ranks are followed by natural disasters and climate change, then political instability and violence, negative economic developments such as inflation, fire, and explosions. Uncertainty about market developments, whether new competitors, company takeovers, or other changes, ranks tenth.

This is a partly automated translation of this german article by dpa.