Businesses in the Asia-Pacific (APAC) region are navigating a volatile risk landscape, with economic downturns, labour shortages, and extreme weather events identified as the most critical threats over the next two years.
Drawing on insights from over 11,000 business leaders in 121 countries, the survey highlighted the persistent and evolving challenges confronting organisations.
Economic concerns, including stagnation and recessions, topped the list of risks in subregions such as Oceania, Southeastern Asia, and Southern Asia.
In Eastern Asia, however, labour and talent shortages emerged as the primary issue, underscoring a widening gap between the demand for skilled workers and the available supply.
Inflation remains another pressing concern, particularly in Oceania and Southeastern Asia, where businesses are grappling with rising operational costs and weakened consumer purchasing power.
The survey also pointed to the rising impact of climate risks, including the increased frequency and severity of extreme weather events. Floods, heatwaves, and other climate-related disruptions are especially pronounced in Oceania and Eastern Asia, heightening the urgency for robust adaptation measures.
Socioeconomic disparities, such as poverty and income inequality, are persistent risks in Southern Asia and increasingly apparent in Oceania and Southeastern Asia. High unemployment rates and limited economic opportunities continue to exacerbate these challenges in parts of the region.
Geoeconomic tensions are further compounding the risk landscape, particularly in Eastern Asia. Trade disputes, tariffs, and investment restrictions are straining supply chains and impacting regional cooperation. These tensions pose a significant challenge for businesses navigating a globally interconnected economy.
Sid Medappa, chief risk officer for Zurich Insurance Group’s APAC division, noted that businesses must adopt a comprehensive risk management approach to address these multifaceted threats.
“As we head into 2025, the ability to build resilience will hinge on how businesses adapt to interconnected risks,” he said.
He stressed the importance of resilience-building strategies to safeguard operations and pursue sustainable growth.
“Businesses in the region need to adopt a proactive, holistic approach to risk management to safeguard their operations and target opportunities for sustainable growth in an increasingly unpredictable global environment,” Medappa said.
The findings also highlighted the need for businesses to prioritise investments in climate resilience, workforce training, and inclusive economic policies.
Organisations are urged to strengthen regional collaboration to mitigate the cascading effects of global uncertainty.
