The Age of Polycrisis: What US Boards Need to Know
Many organizations recognize the potential impact of major risks that can disrupt their operations and cause significant financial loss, but far fewer plan for such events occurring simultaneously or in close succession. When events occur in a cluster — a “polycrisis” — their combined severity can be long-lasting.
Consider this example: A Los Angeles retailer facing a polycrisis, where wildfires threaten store operations, an exceptionally large jury award on an auto claim amplifies liability risks and escalating cyber threats jeopardize sensitive data and online sales — all happening simultaneously and compounding one another.
AXA’s 2025 Future Risks Report, based on a global survey of risk experts and the general population, identifies climate change, geopolitical instability and cybersecurity as the top three risks through 2035, with AI and Big Data close behind.
Risks are increasingly interconnected, becoming more complex and accelerating. At the same time, however, the vast majority of experts and the general population agree that these risks can be mitigated through preventive action.
In this age of polycrises, organizations and their boards must view exposures and response plans differently.
Interconnected risks pose a strategic challenge
The Future Risks Report notes that the top risks have interdependencies. For example, natural disasters, exacerbated by increasing climate risks, frequently trigger supply chain disruptions, which, in turn, can lead to political responses that alter geopolitical alliances. Regional variations relating to geopolitics and AI in the Americas, Europe and the Asia-Pacific region add complexity to the risk landscape. Boards and senior leadership teams, therefore, must manage the aggregation of risk for their organizations — not just individual threats, one at a time.
Other risks in the top 10 also show interconnections. Social tensions and movements often are influenced by demographic trends and macroeconomics. Changes in natural resources and biodiversity can shape energy risks, which can lead to financial instability. The task for boards is to consider each of these risks through a strategic lens, rather than a compliance perspective, and determine how their organizations can achieve resilience.
From risk management to strategic foresight
Effective risk management was never a check-the-box exercise, and the current risk landscape necessitates a forward-looking approach. Indeed, leading organizations are shifting from reactive risk decisions to anticipatory risk mitigation and prevention. These organizations are moving from siloed to holistic risk views, and from historical data to future scenarios. Leading organizations also are expanding their focus on predictable risks to include tail risks — those that have longer-term consequences.
To make these shifts, boards and the C-suite need clearer, actionable insights on how risks interact and impact their organizations’ performance. That requires strong data and analytics applied to corporate systems and processes, as well as partnership with expert resources.
Data and AI are transforming risk and resilience
Although AI and Big Data rank as the fourth top global risk, they offer significant benefits to forward-thinking organizations. For example, AI analytics enable leadership teams to detect risks sooner and make better-informed decisions; geospatial tools can provide visibility on events and exposures in near-real time.
AI does introduce several new risks to organizations, including cybersecurity risk and potential bias in employment practices. The systemic impact of AI across the public and private sectors is still not fully understood. The challenge for corporate leaders is to leverage AI and data tools to enhance risk governance, while striving to understand their downside risks.
A strategic agenda for boards
In this evolving risk environment, boards and senior management teams must have a strategic risk agenda. They should focus on several critical questions, including:
· Where are our key risk concentrations and interdependencies?
· How exposed are we to extreme but plausible scenarios?
· How proactively are we assessing our risk and where are we investing in prevention?
· Are we equipped to respond to simultaneous, multi-risk events?
· How will we continue to serve our clients and support our colleagues through these events?
· Do we have the data and insight to support forward-looking decisions?
The answers to these and related questions will provide organizations the confidence to move forward in mitigating risk, improving governance and attaining resilience in the face of a world with both more opportunity and more risk.
The 2026 AXA Future Risks Survey is open. Add your voice and help inform the insights organizations will use to navigate tomorrow’s risks with greater confidence.
Lucy Pilko is Chief Executive Officer, Americas, at AXA XL. She leads AXA XL’s insurance business throughout the United States, Canada and Bermuda. Before joining AXA XL in 2023, she was the head of Boston Consulting Group’s North American insurance practice.