Cost continues to be the primary factor influencing directors and officers (D&O) insurance decisions in Asia, even as worries over litigation and regulatory scrutiny grow, a survey by Willis, a WTW business, in partnership with law firm Clyde & Co, reveals.
The study found that nearly 80% of directors and officers in the region rank regulatory breaches as a top concern. Cyber-attacks and data loss also remain significant threats, maintaining their positions among the top three risks in Asia. However, health and safety issues, which led the risk rankings in 2024, have slipped to fourth place this year.
James Cooper, partner and head of Financial Institutions and D&O at Clyde & Co, said that leaders are navigating an increasingly complex risk landscape shaped by global economic challenges, geopolitical tensions, and rapid technological advancements.
“Equally important is ensuring that protections, such as D&O insurance, reflect this evolving environment and adequately address areas where executives may feel more exposed, including cyberattacks and data breaches,” Cooper explained.
Shifting Risk Priorities
Interestingly, climate change, which was previously a major concern, no longer appears among the top seven risks in the region. The report also uncovered a gap in board-level expertise on cybersecurity and data privacy, despite 72% of respondents identifying these as critical risks.
Artificial intelligence (AI), meanwhile, ranked lowest on the list of perceived business risks, with only 56% of respondents viewing it as a significant concern. This coincides with limited board expertise in AI-related issues.
Litigation and Revenue-Based Risk Priorities
Civil litigation and third-party claims emerged as top concerns for the first time since 2018, with 65% of directors identifying them as significant threats.
Smaller companies with revenues below $50 million and mid-sized firms generating between $1 billion and $5 billion expressed heightened anxiety over litigation risks. Larger firms, with revenues exceeding $5 billion, were more focused on diversity, equity, and inclusion (DEI), along with bribery and corruption risks. By contrast, smaller firms prioritized financial distress and insolvency.
Compliance Challenges
Asia’s intricate regulatory landscape remains a key challenge, according to Namit Mahajan, head of Financial, Professional & Executive Risks (FINEX) Asia at Willis.
“Despite mounting concerns over litigation and liability risks, cost continues to dominate D&O insurance purchasing decisions,” Mahajan said. “This trend persists even as regulatory scrutiny and shareholder activism increase liability exposure for companies worldwide.”
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