Top Ten Risks Asia Pacific Leaders Face

A recent global survey has identified the top ten risks for senior executives in the Asia Pacific region, published in the article below in Corporate Risk & Insurance by Rose Sineyd.  Interestingly the top 5 risks identified are all uninsurable.  The article also notes that risk readiness has reduced across the survey respondents.  Executives are clearly concerned about these issues and are struggling to implement means for addressing these risks.  The survey highlights the need for strategic risk awareness at board level of an organisation, which would allow appropriate allocation of resources to managing the risk areas of greatest concern.

Risk management leaders struggle to identify and manage the risks that their organisations face, according to the biannual Aon Global Risk Management Survey. This is partly due to the increasingly globalised business world. “In today’s globally interdependent

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environment, risks to businesses, no longer isolated by industry or geography, are becoming complex in nature and global in consequence,” according to the report.

The survey, which had 1,415 respondents from small, medium, and large enterprises across 70 countries, evidenced a significant decline in risk readiness among participants – 16% of whom came from Asia Pacific. Reported readiness among Asia Pacific respondents dropped by seven percent for the top ten risks, and reported loss of income rose 11%.

This region’s top ten risks were identified as:

  1. Economic slowdown/slow recovery
  2. Regulatory/legislative changes
  3. Increasing competition
  4. Damage to reputation/brand
  5. Failure to attract or retain top talent
  6. Business interruption
  7. Failure to innovate/meet consumer needs
  8. Weather/natural disasters
  9. Political risk/uncertainties
  10. Exchange rate fluctuation

The top three risks were the same across all the five main regions: Asia Pacific, Middle East and Africa, Europe, Latin America, and North America. “This ranking reflects the systemic nature of these risks and the high interdependence of global economic activity,” according to the report’s authors.

However, ˜weather/natural disasters” ranks much higher in the top ten risks for Asia Pacific than it does globally, at position number eight versus number 16. The dramatic rise in natural disasters and weather events is supposed to make this a greater priority for risk managers in coming years that it currently is.

“A number of risks, such as terrorism, natural catastrophes and pandemics, are widely reported in the Asian media and yet ranked low in the survey by the business community,” Jane Drummond, regional director for business development with Aon, wrote. “[However] our clients operate in an environment where terrorism, natural catastrophes and pandemics are always possible, and to a large extent these risks are insured by our clients,” she added. On the other hand, the top five risks are not insurable and, as a consequence, attract more attention from business leaders.