The world is changing in fundamental ways, leading to dramatic shifts in the risk landscape faced by businesses. Beyond the profound health and economic uncertainty of our collective trauma from the COVID-19 pandemic, catastrophic natural events are expected to occur more frequently than before. Due to the growing interconnectedness of our world — the digital revolution, geopolitics, climate, and post-pandemic economic recovery will all play major roles in how Asia is impacted.
As businesses slowly recover amid ongoing volatility, it is crucial for future-proof measures to take centre stage. Long-tail risks, too, are increasingly becoming a focal point of the risk landscape in the region.
Aon's 2021 Global Risk Management Survey report is designed to offer business leaders the insights necessary to enable better risk management for better decision-making in an increasingly complex business environment.
The report presents key findings on the top risks faced by companies in Asia and the emerging risks in the region for which businesses need to prepare.
Businesses in Asia need to refresh and strengthen their approach to risk management to be better prepared for the new normal. A dynamic and resilient risk management approach will help to navigate any unpredictable and rapidly occurring changes. The report also highlights the varied level of risk-management maturity across industries. In general, banks in Asia seem to have the most mature approach, followed by industries in which safety is paramount, such as oil and gas, manufacturing, and pharmaceuticals.
Asia as a region cannot be viewed as a monolith with its diverse geopolitics and levels of economic development, making it difficult to generalise risk. However, Business Interruption, Cyber Attacks, and Economic Slowdown currently lead the region’s top 10 current risks. With natural disasters growing more severe and frequent in the region, underrated risks such as Climate Change, are also expected to rise in rank in Asia.
Asia is facing some daunting challenges: slower vaccine rollouts, delayed infrastructure projects, workforce shortages, and increasing pressure to perform higher on environmental, social, and governance (ESG) parameters. Foregrounded by digital transformation and the rise in hybrid working models, innovation and employee wellbeing will be critical for attracting future capital investments. With cyber-attacks and data breaches topping Asia’s list of future risks, businesses will need to map effective risk management strategies to protect their tangible and intangible assets.
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