2026 Global Risks Report: Asia’s top five business risks in an era of uncertainty

As a new competitive order emerges, geoeconomic confrontation has risen to the top of the global risk agenda. Global developments, such as the escalating Middle-East conflict, are altering shipping routes, significantly impacting Asia due to its deep integration in global supply chains.

Cross-border strains, unexpected tariff adjustments, shipping divergences, export controls, and regulatory changes can now shift markets with little warning. Plus, simmering tensions between major economies amplify this uncertainty and complicate business resilience and long-term capital allocation decisions. Notably, C-suite leaders in Asia must ensure their risk teams do not overlook lower-profile conflicts that could have more direct operational impact. Firms that invest in understanding the probable implications of lower-profile, higher-impact flare-ups along their investment and supply chains are better-positioned to mitigate consequences and gain competitive advantage. 

“Presently, when it comes to geopolitical risk, businesses often prioritise short-term efficiency over long-term strategic resilience,” says Mark Wong, Credit Specialties Leader, Marsh Risk Asia.  

“Staying ahead of shifting geopolitical and trade dynamics — while protecting supply chains and managing credit risk — is essential for maintaining cross-border trade and enabling market expansion. Robust scenario-planning and supply-chain diversification are critical to mitigating unforeseen disruptions and ensuring sustained operational resilience.”  

Business leaders must also be equipped with trusted insights and expertise to support data-driven decisions. Marsh’s World Risk Review and proprietary AI tool, Sentrisk, provide timely risk and people intelligence that empower leaders to plan ahead with clarity and pivot at pace — even amid uncertainty. 

At the same time, a shared leadership view on geopolitical changes, integrated into planning and operations, improves clarity and confidence to sustain risk-taking, investments, and trade growth in tough environments. 

The pressure to contribute to economic growth — through value-creation, agility, productivity, and impact — is intensifying for leaders, HR professionals, and employees alike.

However, the pace of technological advancements and adoption — including AI, digital infrastructure and quantum computing — is outstripping governance frameworks, regulation oversight, and workforce readiness, exposing businesses and critical infrastructure to evolving risks.  

This dynamic is especially pronounced in Southeast Asia’s emerging economies where accelerated digitalisation has made the region a hotbed for cyberattacks.  

AI’s capabilities are also lowering the barriers for sophisticated social engineering and digital fraud. Hyper-realistic deepfakes, synthetic identities, and automated phishing campaigns have amplified impersonation risks and scaled deception efforts, challenging traditional cybersecurity measures. 

As a result, the demand for robust cyber and financial crime controls is intensifying. While preventive controls can reduce the frequency and severity of incidents, they cannot fully eliminate the risk of catastrophic events given the rapid evolution of threats and technologies. 

“Leaders should engage cyber risk advisors who leverage deep expertise and advanced data analytics to inform strategic investment decisions, risk positioning, and mitigation or transfer strategies,” says Sean Letz, Cyber Leader, Marsh Risk Asia.

“The optimal risk management approach combines proactive risk management with comprehensive insurance coverage to safeguard against financial and operational impacts.”

The global digital infrastructure market is expanding at 14% CAGR through 2030, requiring up to $3 trillion of investments to meet AI computing power demands. Asia Pacific represents approximately 30% of global digital infrastructure capacity — second only to the Americas — concentrating both opportunity and exposure in the region.

This scale, speed, and geographic concentration create a web of interdependent risks for investors, owners, and operators of digital infrastructure. For example: 

• Supply-chain and trade restrictions: Geopolitical tensions, export controls and supplier concentration can create bottlenecks and delivery delays for critical components and services.
• Cyber vulnerabilities: Data centres are increasingly vulnerable to cyberattacks which could compromise shared infrastructure, breach multiple tenants, and disrupt critical services.  
• Sustainable energy supply: Energy-related risks continue to mount as operators grapple with power reliability, price volatility, sustainability requirements, and fire-safety concerns around battery storage — all of which can affect business continuity.
• Insurance capacity gap: The scale of investment in high-value, specialised assets has outstripped available insurance capacity. Organisations must pursue alternative risk-financing and risk-transfer options to bridge coverage gaps and protect balance sheets.
• Financing and liquidity risks: Large capital requirements for digital infrastructure assets are being supported by a $1.8 trillion private credit market, which can amplify systemic financing and liquidity vulnerabilities that can affect project funding and refinancing.

Taken together, these pressures underscore why digital infrastructure investors, owners, and operators increasingly demand actuarial data and insights to navigate risk trends. Clear evidence backed by decision-grade analysis gives leaders the confidence built on data to adjust or commit to large programs.

This year’s Global Talent Trends study reveals that business leaders are intensifying efforts to boost productivity and efficiency, with 98% of executives planning to implement organisational design changes over the next two years. Investors increasingly favour organisations with AI-enabled, digital-first cultures designed to deliver sustained performance.  

However, these ambitions face significant challenges from a depleted workforce due to ageing populations and HR functions that remain siloed and disconnected from core business priorities. While AI’s role in the future of work is undeniable, only 51% of C-suites in Asia feel their businesses are equipped to reinvent themselves in response to evolving AI capabilities. 

Additionally, the 2026 Global Risks Report highlights a growing concern over "jobless productivity," where technological advancements drive economic output without corresponding job creation. Nearly 100% of executives in Asia expect AI to result in some headcount reduction in the next two years. This trend risks exacerbating a lack of employment opportunities, workforce displacement, and social inequalities, challenging traditional employment models and workforce strategies. 

For leaders, work redesign is the missing piece. According to our Global Talent Trends, 61% of executives in Asia believe that redesigning work to incorporate AI and automation is the initiative that will drive the greatest return. This includes workforce reskilling to up productivity, evolving compensation plans, and rethinking performance management. 

Organisations that effectively integrate human and machine capabilities gain a strong competitive edge, yet only 39% of Asian executives believe their workforce can do this optimally.

"Central to this AI boom is a shift to skills-based workforce strategies that enable greater agility and ensure roles remain relevant amid evolving job functions. Continuous reskilling and upskilling are essential to equip employees with the capabilities needed to thrive alongside AI technologies,” says Lewis Garrad, Asia Career Practice Leader, Mercer.   

“Organisations that proactively align their workforce strategies with AI adoption can enhance productivity, agility, and resilience in an increasingly complex technological landscape.”

A majority (64%) of C-suite executives in Asia say talent scarcity is the top macro driver influencing people plans, while 57% of HR leaders cite attracting talent with vital digital skills as a top workforce challenge facing businesses in 2026. In an AI-driven world, talent — not technology — is the true force multiplier. A shortage of skilled talent limits productivity, delays growth, raises labour costs, and increases operational risks.

This shortage is particularly acute in specialised industries such as semiconductors and data centres, where the demand for skilled professionals far exceeds supply. These sectors are currently embroiled in a "war on talent” characterised by fierce competition among companies to secure and retain talent from a limited pool of qualified experts. Rapid technological advancements, an ageing workforce, and evolving skill requirements exacerbate this challenge.

For leaders, addressing this challenge requires proactive engagement talent competition, structured workforce-planning, and forward-looking skills-mapping.

Garrad emphasises that competitive, transparent reward structures aligned with market benchmarks are crucial to attracting and retaining skilled talent in today’s competitive landscape. He says, “Organisations must conduct comprehensive talent-mapping and strategic workforce-planning followed by targeted talent assessments to accurately identify current and future skills gaps.” 

Furthermore, Garrad highlights that “a strategic approach to talent mobility — facilitating internal transfers and cross-border assignments — can optimise workforce deployment and accelerate the filling of critical roles”. 

Organisations should also prioritise targeted reskilling and upskilling within succession pipelines to reduce over-reliance on external hires and build a sustainable talent base. 

Cost pressures are emerging as a defining socio-economic risk across Asia, and this is particularly evident in healthcare. Medical trend rates are projected to reach 12.5% in 2026, nearly six times the rate of inflation.  

For organisations, rising healthcare and benefits costs are increasing total compensation burdens alongside labour shortages and productivity pressures. For employees, when pay and benefits fail to keep pace with rising living costs, financial strain increases which leads to disengagement and higher turnover rates. This pattern raises organisational costs and hampers investment in improved rewards and benefits, perpetuating a costly cycle. 

Instead of viewing pay and benefits as costs to contain, organisations need to stabilise controls that directly affect workforce resilience and exposure to risk. This means aligning rewards to real employee needs and recognising that those needs differ across life stages and demographics. 

Therefore, benefits design plays an increasingly critical role in an employer’s value proposition and in talent attraction. By rethinking traditional benefits hierarchies, employers can introduce personalised plans across all organisational levels to support multi-generational workforces while strengthening equity and cohesion. 

“While providing comprehensive coverage is challenging, a well-designed, tailored benefits program can help employers balance cost with empathy,” says Steven Yu, Mercer Marsh Benefits Leader, Asia. “One approach of meeting the needs of the workforce is to consider ‘flipping the pyramid’ where instead of supporting those at the top with comprehensive offerings, organisations can broaden eligibility and add new and inclusive employee benefits.” 

By 2030, one in four people in Asia will be over 60, and many markets will be declared as ‘super-aged’. For organisations, longer life expectancy means extended working lives and more multi-generational teams with varied needs coming together, productivity pressures, and knowledge-transfer risks.  

Ageing workforces are often framed as a fiscal burden. However, with the right workforce mindset and structure in place, it can be a strong competitive advantage. Mature workers can present deep institutional knowledge, sector expertise, and leadership continuity — assets that help strengthen organisational resilience if managed effectively. 

To benefit from and support their mature workforces, organisations can encourage healthy ageing through wellness programs, targeted health initiatives, preventive care, and intervention strategies. At the same time, organisations can strengthen financial literacy initiatives and collaborate with pension and insurance providers to ensure retirement preparedness.  

To add, employers should reassess conventional full-time structures and create opportunities for modular, fractional, or advisory roles that allow experienced professionals to contribute meaningfully to the workforce without the limitations of traditional employment models. 

Finally, it is important for employers to continuously evolve job designs, enhance skills development, embrace lifelong learning, and encourage knowledge-sharing among their multi-generational workforces.  

In all Asia markets except Japan and Korea, environmental risk continues to compete with more immediate economic and geopolitical pressures for executive attention. While climate concerns may slip down short-term rankings, the financial consequences are intensifying. 

Asia remains disproportionately susceptible to NatCat and extreme weather. In 2025 alone, the region accounted for four of the six costliest extreme weather events globally and continues to experience rising temperatures at twice the rate of the global average. Total NatCat losses reached approximately $73 billion, exceeding the 10-year average of $66 billion. Alarmingly, only around $9 billion of those losses were insured — leaving a substantial protection gap.

Climate change is now influencing insurability, financing conditions, and capital allocation. Ageing infrastructure and inadequate building standards compound vulnerability, particularly in the construction sector. In the Philippines, for instance, repeated typhoon and flood events have exposed structural weaknesses in urban planning and disaster preparedness, affecting entire cities and critical infrastructure. 

Mitigating climate change is a long-term effort, but timely assessment of the resilience of physical assets enables proactive adaptive measures that can significantly reduce losses. The Building Resilience Index, developed by the International Finance Corporation, offers a unified, credible framework to evaluate how effectively buildings can withstand climate hazards.  

On top of that, transitioning to sustainable energy systems and robust climate adaptation efforts will be critical in easing long-term climate exposure. Hong Kong, for example, is emerging as a regional hub for climate finance, mobilising capital to support businesses in their climate adaptation and energy transition efforts. Yet, across Asia, financing remains a significant constraint. The region faces an estimated climate financing gap of at least $800 billion, driven in part by investor caution toward new or unproven renewable technologies and heightened NatCat exposure. 

“Insurance plays a vital role in enabling energy transition financing by improving project viability through the transfer of risks that might otherwise deter lenders and investors,” says Benjamin Chang, Energy & Power Leader, Marsh Risk Asia. 

“Working with a trusted risk advisor is key to effective risk mitigation and robust underwriting outcomes. A risk advisor helps translate complex risk profiles for insurers and shapes tailored risk management strategies that incorporate risk engineering and NatCat modelling, strengthening project resilience and facilitating better financing terms.”