Chief risk officers (CROs) at insurance companies in the Asia Pacific (APAC) region are dealing with one of the most challenging risk environments in recent years. According to the latest EY-IIF Global Insurance Risk Management Survey, cybersecurity, conduct risk, and operational risks are among their biggest worries.
Cybersecurity Remains a Leading Risk
The survey reveals that 62% of APAC CROs view cybersecurity as a top risk. This concern is driven by the rise of digital threats, geopolitical tensions, increasing digitization, and the large amount of sensitive data insurers hold.
Conduct Risk Gains Focus in APAC
Conduct risk has also become a significant issue in the region, with 46% of APAC CROs identifying it as a priority. This is a sharp contrast with only 5% of CROs in Europe, Middle East, India, and Africa (EMEIA), and 7% in the Americas.
The difference reflects stronger regulatory scrutiny in countries like Australia, Hong Kong, and Indonesia. Regulators in these markets focus on customer fairness, product suitability, and sales practices.
Operational Resilience Concerns Grow
Operational resilience was cited by 31% of APAC CROs, compared to 16% in EMEIA and just 7% in the Americas. This increased attention results from new regulations, such as Australia’s CPS 230, and insurers’ growing dependence on third- and fourth-party service providers.
Regulators are increasingly monitoring insurers’ ability to maintain business continuity during disruptions.
Compliance Risk Continues to Challenge Insurers
Compliance risk remains a concern for 31% of APAC CROs. This reflects the pressure of tighter capital and solvency requirements and stricter data protection laws.
Outlook: Cyber, Regulatory, and Geopolitical Risks Stay in Focus
Looking forward, APAC CROs expect cyber risks, regulatory challenges, and geopolitical instability to remain key issues for the next three years.
Tze Ping Chng, EY Asia Pacific Advisory Insurance Leader, highlighted the complexity CROs face due to varied regulations, unstable geopolitics, and rapid technology adoption. He said the differences in conduct and operational risks across the region show the need for insurers to stay adaptable and strengthen their compliance and risk functions.
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