Business interruption and cyber attacks are the top two concerns among risk managers in the Asia-Pacific region, according to Aon’s 2021 Global Risk Management Survey.
The biennial study found that the COVID-19 pandemic has had a ripple effect across other types of risk, such as heightened awareness of reputation and cyber, and has highlighted the growing importance of managing long-tail risks.
The 2021 edition surveyed over 2,300 respondents in 60 jurisdictions across 16 industries at both public and private companies.
The top 10 risks in Asia-Pacific are:
According to Aon, the top 10 risks also strongly reflect the current landscape, which has been hugely impacted by COVID-19 and the resulting challenging market conditions: slower vaccine rollouts, delayed infrastructure projects and workforce shortages.
The global broker also noted that organisations are shifting their focus from event-based to impact-based risk assessments. Business interruption was once seen as a linear risk, but the COVID-19 pandemic has demonstrated how it can affect multiple industries and companies simultaneously and globally, Aon said.
Pandemic risk took a huge leap in rankings, from 59th in 2019 to fifth in 2021. The number of firms affected by the top 10 risks also grew – with 37% respondents reporting a loss of income due to these risks, up by 14% since 2019.
Climate change was notably absent from the top 10, despite extreme weather events occurring regularly in Asia-Pacific. Respondents in the region ranked it quite low at 21st place. Climate change is inherently tied to other, more tangible risks, where the immediate impact is measurable, and Aon said it considers it an underrated risk.
“Risk profiles have been and continue to change as businesses and economies emerge from the pandemic,” said Anne Corona, Asia-Pacific CEO at Aon. “New exposures have appeared and therefore our understanding, readiness and ability to manage and transfer risk must evolve along with them. Several of the top risks identified for Asia-Pacific in this year’s survey highlight four key areas of client need and the associated interdependencies of these risks. There is an increasing need to innovate to address these ‘known unknowns.’ As we face unprecedented events, businesses must proactively prepare and manage the current and emerging risk exposures.”
