What's Happening?
The Allianz Risk Barometer 2026 has revealed that the insurance gap in the Asia-Pacific (APAC) region remains above 80%, leaving businesses vulnerable to the financial impacts of severe weather events. Despite a quieter hurricane season in 2025, natural
catastrophes are ranked as the fifth most significant risk by businesses in the region. Cyber incidents continue to be the top risk, with 36% of respondents citing them, while the rapid adoption of Generative AI has elevated it to the second most significant threat. The report highlights concerns over operational and legal liabilities due to AI integration, as adoption often outpaces governance and workforce readiness. Business interruption, previously a top concern, has fallen to third place but remains critical due to geopolitical instability and trade protectionism.
Why It's Important?
The significant insurance gap in APAC poses a substantial risk to businesses, potentially leading to severe financial losses in the event of natural disasters. The rapid adoption of AI technologies, while offering operational efficiencies, also introduces new risks related to system reliability and data integrity. The shift in business interruption concerns reflects broader geopolitical tensions and trade issues, which could impact global supply chains and economic stability. Companies may need to reassess their risk management strategies and consider regionalization to mitigate these risks.
What's Next?
Businesses in the APAC region are likely to focus on enhancing their risk management frameworks to address the insurance gap and the emerging threats from AI integration. There may be increased efforts to improve supply chain resilience and explore regional sourcing options to mitigate the impact of geopolitical tensions. Additionally, companies might invest in AI governance and workforce training to better manage the associated risks.
