Chief Risk Officers (CROs) at Asia-Pacific (APAC) insurance companies are grappling with a uniquely challenging risk landscape, marked by surging cybersecurity threats, growing regulatory scrutiny, and rising operational vulnerabilities. These are among the key findings from the latest EY-IIF Global Insurance Risk Management Survey, which highlights a notable lag in operational risk preparedness compared to global counterparts.
Cybersecurity remains the region’s most pressing concern, flagged by 62% of APAC CROs—underscoring the sector’s increasing exposure to digital threats amid heightened geopolitical tensions and accelerating digitization. The insurance industry’s vast repositories of sensitive customer data further elevate the stakes.
Conduct risk has also emerged as a critical focus in APAC, identified by 46% of CROs. This contrasts starkly with just 5% of CROs in EMEIA (Europe, the Middle East, India, and Africa) and 7% in the Americas citing it as a top priority. The divergence is attributed to more aggressive regulatory oversight in jurisdictions such as Australia, Hong Kong, and Indonesia, where authorities are zeroing in on fair customer treatment, product suitability, and ethical sales practices.
Operational resilience is another area where APAC firms trail, with 31% of regional CROs expressing concern—double the percentage in EMEIA (16%) and more than four times that of the Americas (7%). This heightened attention is driven by regulatory measures like Australia’s CPS 230 and growing reliance on external service providers, which amplify the complexity of maintaining consistent service delivery.
Compliance risk also remains a persistent worry for 31% of APAC respondents, particularly as insurers prepare for tighter capital and solvency rules and more robust data privacy regulations.
Looking ahead, CROs anticipate that cybersecurity, regulatory shifts, and geopolitical instability will remain dominant risk factors over the next three years.
Tze Ping Chng, EY Asia-Pacific Consulting Insurance Sector Leader, emphasized that the current environment demands enhanced agility and vigilance. “Regional differences in conduct and operational risks highlight the need for insurers to strengthen their compliance and risk management functions,” he said.
As insurers recalibrate their strategies, tools such as insurance guides and trustworthy insurance solutions are increasingly vital in helping companies understand evolving risks and bolster operational resilience in a fast-changing regulatory environment.
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