Australian executives fear the downsides of artificial intelligence, according to Allianz’s annual global risk survey.

About 61% of respondents list AI as their top concern – the first time the technology has led the risk list for Australia, after placing eighth last year.

Worries around implementation, liability exposures, and misinformation and disinformation are the key factors driving the result.

Cyber incidents and changes in legislation and regulation have moved down one spot each to second and third respectively, while climate change has moved up two places to fourth.

Talent or labour issues and business interruption rank fifth and sixth after sharing joint fourth place last year, followed by natural catastrophes, which is down four spots to seventh.

Political risk and violence has made the top 10 for the first time, coming in at eighth, as has energy crisis, which shares ninth spot with market developments.

Allianz says AI is a “complex” source of operational, legal and reputational risk for businesses.

Globally, AI has recorded the biggest jump, from eighth spot to second on the Allianz Risk Barometer, just behind cyber, which retains its top placing.

“Our report revealed that as more businesses attempt to scale AI in 2026, they will face greater exposure to system reliability issues, data quality constraints, integration hurdles and shortages of AI-skilled talent,” Allianz Australia GM of underwriting Andy Doran told insuranceNEWS.com.au.

“Meanwhile, new liability exposures are emerging around automated decision-making, biased or discriminatory models, intellectual property misuse and uncertainty over who is responsible when AI-generated outputs cause harm.”

Concerns over the resources needed to manage AI-related risks are also growing. Nearly half of the Allianz Risk Barometer respondents say the investment needed to handle AI- and cyber-intensified threats is “moderate”, while another 43% rate it “high”.

Mr Doran says the findings underscore the “expanding operational burden of AI adoption. And although many organisations still see AI as delivering more benefits than risks, a rising share now view it as a distinct and increasingly complex risk category.

“To address these risks, Australian businesses should focus on upgrading their AI governance frameworks, investing in employee training and responsible AI practices (from bias detection to data quality assurance), and developing contingency and incident-response plans for AI-related failures or misuse”.