BUSINESS interruption, in the form of geopolitical tensions, protectionist trade policies and natural disasters, is a persistent threat to companies in Asia-Pacific (APAC), according to the Allianz Risk Barometer 2026 survey.
Twenty-nine percent of respondents ranked business interruption as a top risk.
“The increasing severity and frequency of related perils continue to pose ongoing operational and financial challenges to businesses,” the study said, noting that business interruption — which includes disruptions caused by supply chain breakdowns, energy shortages and operational shutdowns — is the third most significant risk in the Asia-Pacific region.
It also ranked among the top three risks in major economies such as China, India, Japan, Malaysia, the Philippines, Singapore and South Korea.
Closely linked to business interruption is the risk arising from changes in legislation and regulation, including trade tariffs, the study said. This risk ranked fourth globally at 25 percent, unchanged from the previous year, since companies remain concerned about growing protectionism.
“Commerce is increasingly taking place between geopolitically aligned economies,” the survey said, adding that this leads to changes in supply routes and the rise of next-generation trade hubs in Asia, including Vietnam, Malaysia and Thailand.
Moreover, the report cited that 2025 marked a clear shift toward more protectionist trade policies and tariff wars, which added uncertainty to the global economy.
“Geopolitical risks are putting supply chains under increasing pressure,” the study said, noting that only 3.0 percent of respondents said they consider their supply chains to be “very resilient,” reflecting widespread vulnerability to shocks.
Trade restrictions have expanded rapidly, with Allianz Trade estimating that the number of restrictions has tripled over the past year, affecting around $2.7 trillion worth of merchandise — nearly 20 percent of global imports.
Companies are rethinking their supply chain strategies, exploring approaches such as friendshoring and regionalization to reduce exposure to geopolitical risks.
Friendshoring, or allyshoring, is a supply chain strategy in which companies source materials and manufacture goods from countries that are political and economic allies.
Natural catastrophes
Natural catastrophes are also a cause for worry in the region, ranking fifth in Asia-Pacific at 22 percent, and among the top three risks in Japan, Malaysia, the Philippines and Thailand.
The survey noted that Asia-Pacific experienced a series of severe natural disasters in 2025, including the Myanmar earthquake, typhoons Matmo, Ragasa and Bualoi, Cyclone Alfred, wildfires in South Korea, and widespread flooding in Malaysia and Thailand.
It said that a delayed start to the tropical cyclone season contributed to severe flooding and landslides, leading to significant human and economic losses across Asia.
These were made more severe by the region’s large insurance gap, which remains above 80 percent, leaving many losses uninsured.
“Economic and insured losses remained high, albeit lower than the 10-year average, and the evolving nature of natural catastrophes continues to pose significant challenges to businesses and the [re]insurance industry,” the study said.
Insured losses from natural catastrophes are seen to reach $107 billion for 2025, while economic losses are over $200 billion.
