Singapore, July 18, 2022 – 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.”
