Rethinking Resilience: Addressing Asia Pacific’s Top Risks

Asia Pacific’s economic dynamism is matched by its exposure to volatility. The region’s legacy of low-cost manufacturing is evolving into a hub of innovation, urbanization and digital transformation. Yet this progress is tempered by rising geopolitical tensions, climate-related disasters and cyber threats. Organizations face mounting pressure to manage interconnected risks while maintaining growth.

Results from Aon’s 2025 Global Risk Management Survey reveal that APAC leaders are acutely aware of these challenges. It also highlights the growing need for businesses to rethink their approach to resilience – and use new strategies to turn uncertainty into opportunity.

The Top Ten Risks Impacting Asia Pacific Today

Asia Pacific’s risk profile is complex. Leaders in the region are contending with a convergence of digital, environmental and geopolitical threats that demand an integrated approach to risk management.

Top 10 Current Risks in Asia Pacific

1. Cyber Attack or Data Breach
2. Economic Slowdown or Slow Recovery
3. Business Interruption
4. Increasing Competition
5. Supply Chain or Distribution Failure
6. Regulatory or Legislative changes
7. Damage to Reputation or Brand
8. Failure to Attract or Retain Top Talent
9. Weather or Natural Disasters
10. Cash Flow or Liquidity

These risks are deeply interconnected. Cyber attacks can trigger business interruption and reputational damage, while natural disasters disrupt supply chains and strain liquidity. Moving beyond siloed risk management to address the cascading impacts of these key risks is essential.

Cyber Risk: A Growing Threat to Business Continuity and Reputation

Cyber risk remains the top concern for organizations across Asia Pacific, with the region facing a surge in sophisticated threats amid rapid digitalization. Financial institutions, telecommunications providers, manufacturing firms, and other sectors are experiencing escalating disruption from ransomware, phishing, and credential stuffing attacks. Automation and AI are enabling threat actors to scale their operations – sending billions of phishing emails daily, deploying botnets for mass attacks, and leveraging AI-powered malware that adapts to evade detection.

Meanwhile, deepfakes and AI-driven fraud are also on the rise, with criminals weaponizing synthetic media and advanced impersonation techniques for social engineering and reputational sabotage. These attacks can lead to significant financial losses, erosion of consumer trust, and lasting reputational damage. High-profile breaches may also prompt regulatory scrutiny and negative media coverage, which can persist long after an incident – making proactive cyber resilience essential for safeguarding brand value.

As of 2025, cyber maturity across the Asia Pacific is improving, but remains uneven – not only between countries, but also across industries. For example, financial institutions in Singapore and Australia often implement advanced security controls and incident response protocols, while smaller organizations in emerging markets may lack dedicated cyber security teams or rely on basic protections. This disparity is further complicated by widespread reliance on third-party vendors and cloud services which expand the attack surface and increase the likelihood of cross-border breaches.

Only 12% of Asia Pacific respondents to our survey currently quantify cyber risk – a critical gap that underscores the need for stronger risk management practices. Organizations need to assess their exposures and understand the potential financial impacts of cyber incidents to manage it effectively – as this enables more informed decisions around insurance coverage and risk financing.

In parallel, robust disaster recovery and business continuity plans – supported by regular tabletop exercises to test response capabilities – are essential to minimize operational disruption, financial loss, and reputational damage.

Supply Chain Disruption in a Highly Interconnected Region

Asia Pacific’s supply chains are among the most complex and globally integrated, making them highly susceptible to disruption.

Geopolitical tensions – such as U.S.-China trade disputes and export controls on semiconductors (and more recently rare earth minerals) – have forced organizations to rethink sourcing strategies. For example, electronics manufacturers in Taiwan and South Korea are diversifying suppliers to reduce reliance on single markets, and some companies are moving operations to Vietnam or India in response to shifting trade policies.

As organizations adapt to shifting trade flows and geopolitical tensions, supply chain reconfiguration – such as near-shoring and friend-shoring – is becoming increasingly common. However, these transitions elevate disruption risks, especially during periods of adjustment to new suppliers and routes.

At the same time, new regulations or protectionist policies – such as export restrictions on rare earth materials – can result in companies maintaining existing supply chains or create new operational bottlenecks. Security threats, including piracy in the Malacca Straits, armed robbery, and political violence in key shipping lanes, further compound these risks and highlight the need for robust mitigation strategies.

To build more resilient supply chains, organizations across Asia Pacific are investing in greater transparency and real-time visibility. Advanced analytics and predictive risk intelligence are creating leading risk indicators that help businesses spot vulnerabilities early and respond quickly to emerging threats.

Companies should also consider how they use risk transfer to make their supply chains more resilient. According to our survey, only 11% of respondents in APAC have evaluated risk financing and transfer solutions for supply chain disruption, indicating considerable room for growth.

There’s also growing recognition that efficiency alone is not enough – and resilience is now essential. This means companies are diversifying supplier bases and adopting new technologies to ensure they can adapt quickly to shifting trade flows, regulatory changes, and geopolitical uncertainties.

Severe Weather Poses a Significant Regional Impact

Asia Pacific is highly exposed to natural disasters, ranking this risk higher than any other region. In 2024, the region accounted for 20% of global economic losses from catastrophes, with events like the Australian wildfires, Japanese earthquakes, and typhoons in Southeast Asia causing $74 billion in damages – of which only $4 billion was insured.

For businesses in the region, that means insurance premiums for high-risk zones are rising sharply, and some perils are nearing uninsurability. For example, infrastructure projects in coastal China and northern Australia are facing skyrocketing costs due to the increased frequency and severity of floods and cyclones. As a result, parametric policies are increasing being used to address some of these challenges – such as by providing payouts when seismic activity exceeds a certain threshold.

Extreme weather events also highlight how a single climate incident can cascade through the region’s interconnected supply chains. Super Typhoon Ragasa struck the northern Philippines in September 2025, causing widespread flooding, port closures, and flight cancellations across Hong Kong, Taiwan, and southern China. The resulting power outages and logistics disruptions forced production halts in key manufacturing hubs and delayed shipments throughout Asia Pacific.

This growing exposure to severe weather events is prompting organizations to use advanced modeling to reassess asset locations, optimize capital allocation, and guide investments in resilient infrastructure. For instance, logistics companies in Singapore are leveraging analytics to model flood risk and inform decisions about elevating warehouses and upgrading transport networks.

The Future Risk Landscape in Asia Pacific

The future risk landscape in APAC reflects growing complexity and interconnectedness. Cyber continues to dominate, while geopolitical volatility and competition intensify.

Top 10 Future Risks in Asia Pacific

1. Cyber Attack or Data Breach
2. Increasing Competition
3. Economic Slowdown or Slow Recovery
4. Geopolitical Volatility
5. Weather or Natural Disasters
6. Business Interruption
7. Regulatory or Legislative Changes
8. Rapidly Changing Market Trends
9. Artificial Intelligence (AI)
10. Commodity Price Risk or Scarcity of Materials

Geopolitical Volatility: Rising Tensions and Strategic Implications

Geopolitical risk is climbing rapidly in APAC – surging ten places in the future risk rankings compared to our previous survey – driven by regional tensions and shifting trade policy. Disputes in the South China Sea, ongoing unease between India and Pakistan, and political instability in Myanmar, Thailand and Cambodia are creating uncertainty for organizations.

A wave of elections across more than a dozen APAC countries in 2024 has further heightened instability, with misinformation campaigns and deepfake technology fueling distrust and unpredictability. For businesses, this environment has made strategic planning and decision-making more complex, as leaders must navigate rapidly shifting regulatory landscapes, anticipate potential changes in government policy, and manage reputational risks associated with political unrest.

Nationalization risks and tariffs are influencing investment decisions, particularly in sectors like energy, technology, and life sciences, and defense spending is also increasing across the region. The perceived shift in security leadership – such as the U.S. redeploying military assets away from Asia Pacific and China’s growing influence in the Pacific Islands – adds another layer of uncertainty, prompting organizations to reassess their risk exposure and contingency plans.

This is a complicated landscape to operate in. To stay ahead, organizations in APAC need to integrate geopolitical risk into enterprise risk management frameworks, ensuring it is regularly assessed alongside financial and operational risks. Scenario planning and stress testing are also critical to understand how sudden changes – such as new tariffs, sanctions, or regional conflicts – could affect supply chains, revenue streams, and strategic objectives.

Conducting executive crisis tabletop exercises can help to test decision-making and the feasibility of crisis strategies, ensuring leaders are prepared to respond effectively to evolving events. Finally, organizations should also review insurance and risk transfer strategies to ensure coverage reflects evolving exposures related to political instability, supply chain disruption, and regulatory change.

Intensifying Competition and Disruptive Innovation

Competition across Asia Pacific is intensifying – with survey respondents ranking this as the second biggest future risk. The manufacturing industry is especially fierce, with China, Vietnam, and India among the countries driving the region’s reputation for high-quality, cost-effective production. This dynamic environment is leading to constantly evolving pricing models and supply chain strategies. As customer expectations and industry standards continue to shift, established players are facing mounting pressure from both regional rivals and new market entrants.

AI is accelerating this shift by enabling disruptive innovation in many industries. Smaller, agile companies are leveraging AI for product development, customer engagement, and operational efficiency – allowing them to challenge legacy organizations and respond to market changes with speed. This wave of digital transformation is lowering barriers to entry and fueling competition, forcing established firms to rethink their strategies and embrace new technologies.

In response, APAC leaders should invest in innovation - adopting AI responsibly to drive growth. For organizations in many industries, success in this environment will depend on their ability to adapt quickly and keep pace with both emerging disruptors and evolving market demands.

Strengthening Resilience: Three Priorities for Asia Pacific Organizations

Asia Pacific organizations face a rapidly evolving risk landscape, where interconnected threats demand more than traditional risk management. To thrive amid uncertainty, leaders must take deliberate steps to strengthen their approach and turn risk insights into strategic advantage.

1. Refresh Risk Registers: Fast-moving risks such as cyber, geopolitical volatility, and AI, require organizations to regularly reassess exposures and update governance frameworks to reflect today’s realities.
2. Embed Data and Analytics into Decision-Making: In today’s dynamic landscape, using data to guide decision-making is essential. Organizations who harness analytics and modeling can anticipate emerging threats, understand the potential impact of different risk scenarios, and make more informed choices about risk financing. This helps capital to be deployed efficiently and helps companies to respond proactively to changes in the risk environment.
3. Rethink Resilience as a Strategic Advantage: Forward-thinking organizations are reimagining resilience as a driver of value and competitive differentiation. By embedding resilience into strategy and operations, businesses can adapt quickly and unlock new opportunities for growth.

Why It Matters

Asia Pacific’s risk landscape is complex and interconnected, but organizations that rethink resilience and embrace innovation can turn volatility into competitive advantage. By refreshing risk registers, embedding analytics, and adopting strategic risk management approaches, companies can navigate uncertainty and drive growth.

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