What business risks insurers need to be aware of this 2025

Labour and talent shortages have overtaken economic concerns, said business leaders.

Asia-Pacific (APAC) is grappling with economic uncertainty, climate risks, and labour shortages, which have emerged as the top risks for businesses over the next two years, according to the Executive Opinion Survey conducted by the World Economic Forum in partnership with Marsh McLennan and Zurich Insurance Group.

Sid Medappa, Chief Risk Officer for APAC at Zurich Insurance Group, emphasised the importance of a proactive and integrated risk management approach to address these interconnected challenges. 

He stressed that building resilience will be critical for businesses to navigate economic uncertainty, mitigate climate risks, and address workforce shortages as they head into 2025.

In Eastern Asia, however, labour and talent shortages have overtaken economic concerns, reflecting growing challenges in sustaining a skilled workforce, particularly in IT and digital sectors.

Climate-related risks are also intensifying across the APAC region, with extreme weather events such as floods and heatwaves posing significant threats, especially in Oceania and Eastern Asia. 

The increasing frequency and severity of these events underscore the need for businesses to invest in climate adaptation and mitigation strategies to protect operations and assets.

Inflation continues to weigh heavily on businesses in Oceania and Southeastern Asia, driving up costs and straining consumer spending. 

Meanwhile, socioeconomic disparities, including poverty and income inequality in Southern and Southeastern Asia, further complicate the risk landscape.

Geoeconomic tensions, particularly in Eastern Asia, are also adding to the challenges, as trade disruptions, sanctions, and investment restrictions hamper supply chains and economic stability.

The survey, which gathered insights from over 11,000 business leaders across 121 countries, highlights the ongoing economic downturn—marked by recessions and stagnation—as the primary concern for most sub-regions, including Oceania, Southeastern Asia, and Southern Asia.