AI overtakes climate change as top risk
Artificial intelligence has become the top concern among risk experts globally, overtaking climate change for the first time in 13 years, except during the COVID-19 pandemic in 2020. According to the AXA Future Risks Report, a survey conducted by Ipsos between May 14 and June 24, 2026, drew on 4,345 experts across 62 countries and a separate panel of 24,000 members of the general public across 19 countries.
The report captures the insurance market’s struggle to keep up with AI’s rapid emergence, with 54% of experts describing it as a rapidly emerging risk. However, only 9% believe public authorities are well prepared to address it, with that figure dropping to 3% in Europe.
The gap between recognition and readiness is leading to coverage disputes, unreliable underwriting assumptions, and clients discovering mid-claim that what they thought was covered isn’t. Among experts who named AI and big data as a top risk, the majority described it as rapidly emerging, yet few believe authorities are prepared to address it.
As AI transforms the threat environment, insurance coverage is becoming increasingly fragmented. Providers are now introducing specialized exclusions, updated policy terms, and additional endorsements related to AI. These varying approaches create inconsistencies, leaving policyholders with potential coverage gaps between different insurance layers.
AI Transforms Insurance Sector
Garrett Droege, WTW’s North America leader for fintech and digital assets, notes that AI discussions now dominate the cyber insurance sector. ‘Clients are asking whether their cyber policies extend to losses caused by generative AI, while insurers are carefully reviewing their portfolios to assess broader risks,’ he explained.
The AXA report shows why AI-related worries are intensifying, as generative AI heightens the complexity of fraud, impersonation, and misinformation, making these threats harder to identify. This explains why the general public’s top cyber concern has shifted from infrastructure attacks to reputation and impersonation risks, such as identity theft and deepfake deception.
Energy risks reclaimed fifth place among experts in 2026, reversing a three-year decline, as the survey was conducted amid ongoing tensions near the Strait of Hormuz. The report links geopolitical instability directly to energy vulnerabilities while also highlighting AI’s growing electricity demand as a new strain on power grids.
A 2026 study by Sedgwick found that 65% of Fortune 500 companies list economic and geopolitical instability as their primary supply chain threat. Additionally, 38% flag cyber risks as a critical weakness in their supply chains, aligning with AXA’s findings on how geopolitical, energy, and technology risks are increasingly intertwined.
Experts Feel Unprepared
Across nearly every risk category, experts recognize the dangers but feel unprepared to address them. Only 13% believe authorities are adequately prepared for climate change, while just 15% say the same for geopolitical instability. Social fragmentation and AI both rank at 9%, the lowest confidence levels in the survey.
The AXA survey also reveals public expectations, with 68% of the general population viewing insurers as essential for safeguarding against new risks. For commercial clients, insurers are expected to provide not just risk coverage but also education and knowledge-sharing—especially among younger customers.
In the context of similar situations, the current preparedness gap in insurance coverage for AI-related risks is reminiscent of the “silent cyber” problem the market worked through a decade ago. As AI continues to evolve and impact various industries, they will need to adapt and provide clearer guidance on what is covered and what is not, to avoid coverage disputes and ensure that clients are adequately protected.
Seventy-two percent of clients under 45 see insurers as key for protection, compared to 65% of those aged 45 and older. This gap highlights the need for insurers to educate clients about emerging threats and their role in managing them.
