Pandemic risk and business interruption are top concerns

Global Technology  Industry Risk Study 2022 – Asian Perspectives report published by Marsh

While rising demand for digital connectivity has increased the potential for service  disruptions in the communications, media, and technology sector, companies in Asia are facing constraints in  obtaining adequate insurance cover to match the risks they face. This is according to the Global Technology  Industry Risk Study 2022 – Asian Perspectives report published today by Marsh, the world’s leading insurance  broker and risk advisor. The report highlights the key risks and challenges identified by a survey of risk  professionals in communications, media, and technology companies (CMT). 

In Asia, four out of the top five risks related to firms’ abilities to keep their systems running with data security and  privacy as the top risk (76%), followed by pandemic risk (58%), digital business interruption (56%), regulatory  compliance (54%) and physical business interruption (52%).  

The report also uncovered key differences in the top risks for technology companies in the region compared with  the rest of the world. While pandemic risk ranked second in Asia due to ongoing lockdowns, globally it ranked ninth.  Technology companies in Asia also expressed greater concern over regulatory compliance risk (54%) compared to  their global peers (40%). This is largely due to concerns over a rise in trade disputes and resource protectionism,  as well as increased government scrutiny over areas such as environmental, social, and governance (ESG) issues,  foreign direct investment, and data privacy. 

In a challenging insurance market, respondents in Asia generally were more likely to be dissatisfied with insurance policy terms than their global counterparts. They also face constraints in obtaining adequate cover for the top risks  they are most concerned about, such as pandemic risk, data security and privacy, and business interruption, the  survey found. 

Larry Liu, Communications, Media, and Technology Industry Leader, Marsh Asia, said: “A complex risk landscape,  lack of historical loss data for emerging risks, limited capacity, and pricing issues, together with increased economic  and geopolitical volatility, have led many CMT companies in Asia to reassess their risk transfer approach. In order  to achieve continued growth and build organisational resilience, CMT companies need to ensure that their risk  mitigation and allocation strategies are aligned to changes in their operating environment so that they will be ready  to respond with greater agility and cohesiveness.”