China slowdown, climate and business disruption rise on risk agendaMarch 10 2020 by InsuranceAsia News Staff
Several reports by key market players highlight the increased market risk brought on by environmental, geopolitical and business disruption changes.
The World Economic Forum has released the Global Risks report in partnership with Marsh & McLennan and Zurich Insurance – which illustrated stakeholders’ heightened concern for environmental and geopolitical risks. The research drew input from 800 global experts.
The survey showed that climate-related issues took the top five spots for “long-term risks in terms of likelihood.” The “failure of climate change mitigation and adaption is the year’s number one long-term risk by impact.” One decade ago in 2010, respondents marked economic risks highest – with fiscal crises, asset price collapse and China’s economic slowdown on their mind.
Concerns of geopolitical tensions impacting an interconnected global economy also ranked high — meaning potential business disruptions in supply chains, trade tensions and conflict and potential decline of economic integration. The report commented that “turbulence is the new normal” – over 78% of respondents are expecting economic confrontations to increase in 2020 – which could mean heightened capacity and demand for political risk coverage.
Similarly, Allianz’s Global Risk Barometer for 2020 surveyed nearly 2,800 respondents from over 100 countries, and found that cybersecurity and business interruption (catastrophes, one-off events, political risk) are top concerns for businesses.
Patrick Zeng, chief executive of Hong Kong and greater China at Allianz Global Corporate Solutions (AGCS), said: “With the country locked in a trade war with the US that does not look to be fully resolved any time soon, risk managers in China have chosen business interruption as their top risk, again, as the unpredictable nature of tariff announcements has made it difficult to plan accurately for the future.”
Business interruption, natural catastrophe and cyber risk made the top three list for Chinese players.
Mark Mitchell, chief executive of AGCS Asia Pacific, highlighted: “Changes in legislation and regulation cracks the top three business risks for Singaporean companies for the first time, reflecting the current unstable economic environment that businesses operate in as trade disputes such as the one between the US and China continue, as well as uncertainty over the eventual form of Brexit, dent confidence.”
Mitchell added: “Perennial leaders business interruption and cyber incidents continue to stress local risk managers, maintaining their positions as the number one and two top risks for businesses in Singapore following a year of major supply-chain disruptions and prominent data breach incidents.”
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