The Allianz Risk Barometer 2026 highlights cyber and AI as the top business risks, with cyber incidents being the leading concern worldwide. The report emphasizes the increasing reliance on digital infrastructure and the corresponding rise in cyber threats, driven by geopolitical tensions and the proliferation of AI-powered attacks. Experts warn that cyberwarfare is escalating, with nation-states pre-positioning within critical infrastructure to prepare for potential kinetic conflicts, akin to a Cold War scenario. The distinction between cybercriminal activity and state-sponsored cyberwarfare is increasingly blurred, complicated by plausible deniability and hybrid threat models. Governments like the UK and US are establishing dedicated cyber commands capable of offensive and defensive operations, deterring private sector hack-backs due to risks of escalation. The threat landscape is characterized by long-term stealthy infiltration, disinformation campaigns, and the deployment of autonomous AI agents for hybrid warfare. The consensus underscores the need for enhanced detection, accurate attribution, and international cooperation to mitigate risks. The overall outlook suggests that cyber conflicts will become more frequent and severe, with the potential for escalation into physical and kinetic warfare, requiring vigilant preparedness and resilient infrastructure.