The top four Asia Pacific risks for 2018 mirror the global risks with Business interruption (BI) (# 1 with 42% of responses / # 1 in 2017) and Cyber incidents (# 2 with 38% of responses, up from # 4 in 2017), according to the recently released Allianz Risk Barometer for this year.
Larger losses from Natural Catastrophes (# 3 with 30% of responses), are also a rising concern for businesses in the region. BI is the top risk in China, Hong Kong, Japan, and South Korea, which made its debut in the annual rankings.
“In terms of insured losses, 2017 was the costliest natural catastrophe year in five years. Despite most catastrophes taking place in North America and Mexico, they still impact Asia, as 50% of claims by value are from companies not based in these areas but from subsidiaries of multi-national companies located outside the disaster zones,” said Mr Mark Mitchell, Chief Executive Officer, AGCS Asia.
“This reflects the growing trend of globalisation and the need for multinational companies to adopt a global approach to risk exposures and insurance coverage. As manufacturing shifts east, Asia is increasingly exposed to such disasters because of economic growth and concentration of suppliers. Manufacturing and outsourced services have migrated to China, India and other high-growth markets in South East Asia and so too have large claims.”
Most important business risks in APAC in 2018
- Business interruption (including supply chain disruption)
- Cyber incidents (eg cyber crime, IT failure, data breaches)
- Natural catastrophes (eg storm, flood earthquake)
- Market developments (eg volatility, intensified competition / new entrants, M&A, market stagnation, market fluctuation)
- New technologies (eg impact of increasing interconnectivity, nanotechnology, artificial intelligence, 3D printing, drones)
- Changes in legislation and regulation (eg government change, economic sanctions, protectionism, Brexit, Euro-zone disintegration)
- Fire, explosion
- Climate change/increasing volatility of weather
- Political risks and violence (eg war, terrorism, civil commotion)
- Loss of reputation or brand value
The Allianz Risk Barometer is published annually by Allianz Global Corporate & Specialty (AGCS).The 2018 report is based on the insights of 1,911 risk experts from 80 countries, including 372 respondents from Asia.