Full Capacity: AI boom’s supply chain trap

May 30 2026 by

Welcome to Full Capacity, a weekly briefing on all the most important developments of the past week with a personal take on the news from our editor-in-chief, Mithun Varkey, delivered to your inbox every Saturday.   

Resolution. IAG has reached a confidential settlement with Greensill Bank AG and its administrators in the US$2.8 billion lawsuit in Australia.

Last week, InsuranceAsia News first reported that Greensill Bank’s administrators were nearing a settlementwith its insurers, including Tokio Marine, after the parties entered a mediation.

Merger review. Australia’s competition regulator has begun a review of Zurich’s acquisition of Beazley. The regulator noted the deal creates competitive overlap across several specialty lines.

Risk pool. South Korean non-life insurers will jointly underwrite US$200 million in war-risk cover for 10 vessels operated by small and mid-sized domestic shipping firms currently waiting near the Strait of Hormuz.

Nat cat update. Heavy rain and flooding in southern and central China have caused losses of US$110 million, according to data from the National Financial Regulatory Administration.

Under scrutiny. South Korea’s Fair Trade Commission has opened an investigation into suspected bid rigging in group accident insurance, with eight non-life insurers reportedly raided.

Asia in focus. The Fidelis Partnership (TFP) is making Asia a core pillar of its global expansion, with senior leadership emphasizing urgency and long-term conviction in the region’s growth.

“Asia is an active strategic focus for TFP”, deputy chairman Charles Mathias told InsuranceAsia News, noting that the firm is “substantially underweight in Asia” and has “plenty of room to grow across pretty much every line of business”.

Midstream faultlines

We’ve all read the warnings about AI. Ethical risks. Job displacement. Deepfakes. Hallucinations and potential liability claims.

However, much less has been made about the AI trade boom and the potential aggregation risks that it poses to supply chains.

According to new research from Allianz Trade, exports of AI-enabling goods have doubled over the past decade to US$3.8 trillion, now accounting for a staggering 15% of global trade.

That growth rate – far outpacing the 40% rise in overall goods trade – is breathtaking.

But here is the punchline that should worry all credit risk officers: Asia dominates 65% of those exports, with just three economies – China, Taiwan and Hong Kong – controlling nearly half of global supply.

On the demand side, the picture is no less fraught. Since 2023, the US has tripled its imports of advanced AI products, underpinned by 5,427 data centres – 45% of the global total.

Payment risk is now concentrated in a handful of massive US tech buyers whose supply chains run through a very narrow Asian corridor.

The AI revolution is being built on a geographic bottleneck.

Consider the numbers. Taiwan alone operates the world’s largest foundry, holding 70% market share in advanced semiconductors.

Allianz Trade notes that two-thirds of the recent expansion in Asian semiconductor exports has come from price increases, not volume.

The Middle East crisis could send those prices soaring further, according to Allianz Trade.

The fact that the majority of AI-enabling goods exports are driven by a small group of countries also makes their trade model highly vulnerable to potential shocks.

The report identifies Taiwan and Hong Kong as the most exposed to an AI bubble burst, with 74% and 59% of their respective exports tied to AI goods. Singapore and the Philippines are close behind at 47% followed by Malaysia (43%) and South Korea (32%).

The AI boom is real. The growth is real. But so is the fragility. While AI’s downstream dangers are real, one should not overlook the risks from its midstream faultlines.

People moves

In senior appointments around the region, QBE appointed Johnny Suen as head of property for Hong Kong.

AIG has promoted Tilden Goh to head of energy for Asia Pacific.

In New Zealand, Zurich has appointed Alan James as head of distribution, while insurer Tower has appointed Michael Skeens to the newly created role of chief operations officer.

Do check out our weekly people move round-up to stay up to speed on the most important appointments in the region.

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