The 2023 edition of Aon’s biennial survey found the top business risks in Asia Pacific are cyber attack/data breach, economic slowdown/slow recovery and business interruption. After placing second in the 2021 survey, cyber attack/data breach now ranks as the top risk for Asia Pacific businesses. This speaks to the pervasiveness of cyber risk and mirrors a global trend of growing awareness of the cyber threat landscape, as evidenced by the steady upward progression of the risk in the top 10 rankings over recent years. High-profile data breaches and ransomware attacks in the region increased data protection review and enforcement by regulators, and a notably hardening insurance market are likely to have exacerbated cyber risk concerns.
Economic slowdown/slow recovery ranked as the region’s number two risk. The Asia Pacific region faces a challenging economic backdrop, with organisations and governments feeling the effects of tightening monetary policy. The cost of capital has increased, and interest rates are likely to stay higher for longer. Nevertheless, inflation is expected to recede faster in this region than in others, falling to target levels by 2024 rather than 2025. Despite its challenges, Asia Pacific will likely remain the most active region in terms of GDP growth in 2023, with growth expected to rise 0.7 percent to 4.6 percent. China and India are projected to contribute half of global GDP growth in 2023 and 2024, highlighting the economic power of the region.
Anne Corona, chief executive officer of Asia Pacific for Aon, said, “As leaders look to the future of their businesses in an increasingly volatile world, newer and emerging threats continue to reshape their views of risk and sharpen their need to make better decisions. With cyber risks/data breach, economic slowdown and business interruption identified as top risks for businesses facing organisations in Asia Pacific today, there is a compelling need for a shift in mindsets around being better prepared for risks by using data and analytics and experts to advise on the dynamics of long-tail risks.”
The top ten business risks for Asia Pacific according to the 2023 Global Risk Management Survey are:
1. Cyber Attack/Data Breach
2. Economic Slowdown/Slow Recovery
3. Business Interruption
4. Failure to Attract/Retain Top Talent
5. Rapidly Changing Market Trends
6. Supply Chain/Distribution Failure
7. Regulatory/Legislative Changes
8. Increasing Competition
9. Failure to Innovate/Meet Customer Needs
10. Commodity Price Risk/Scarcity of Materials
Notably, only two of the top five current risks in the Asia Pacific are insurable and half of the overall top 10 are uninsurable at present.
Though climate change does not feature in the top 10, it directly impacts four of the top 10 risks: business interruption, changing market trends, supply chain/distribution failure and regulatory/legislative changes. The growing frequency and intensity of extreme weather events in the region increase the risk of business interruption and supply chain/distribution failure considerably, and the rapidly evolving net zero transformation has a myriad of implications for market trends and mandatory climate disclosure across sectors.
The top ten global risks are:
1. Cyber Attack/Data Breach
2. Business Interruption
3. Economic Slowdown/Slow Recovery
4. Failure to Attract or Retain Top Talent
5. Regulatory/Legislative Changes
6. Supply Chain/Distribution Failure
7. Commodity Price Risk/Scarcity of Materials
8. Damage to Reputation/Brand
9. Failure to Innovate/Meet Customer Needs
10. Increasing Competition
Conducted every two years since 2007, Aon’s Global Risk Management Survey provides data and insights to enable better decision making around risk in an increasingly volatile and complex business environment.
The Asia Pacific Insights from the Global Risk Management Survey report is available here.
