Gap Year | Risk Updates for Weeks of 12 January

Unbreakable Ventures

Gap Year | Risk Updates for Weeks of 12 January - 26 January '26

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Gap Year | Risk Updates for Weeks of 12 January - 26 January '26

Threat concerns this week: Huge weather related insurance gaps. Drama out of Davos and WEF '26 Report. And 5 quick fires on AI and resilience debt.

Ollie Law, Brad Law, and Martin Petts

Jan 25, 2026

Hello 👋 get a brew on because these are the top emerging risks between January 12th and 26th, 2026…

Review our report’s terminology here ↗

Our main risk this fortnight is…

1. Environmental: APAC Insurance Gap Leaves 80% Weather Exposure Unprotected

The Allianz Risk Barometer 2026 reveals natural catastrophes have risen to the second-highest global business risk, climbing from sixth position in 2024, with 31% of respondents identifying extreme weather events as their top concern, second only to cyber incidents at 38%.
Asia-Pacific faces a protection gap exceeding 80% for weather-related losses, meaning the vast majority of economic damage from climate events falls directly on businesses and governments rather than being transferred to insurers, creating substantial unhedged financial exposure across the region.
The 2024 Asia-Pacific natural catastrophe bill reached $65 billion in economic losses, yet only $12 billion was covered by insurance, demonstrating the stark reality of this protection gap and the financial vulnerability it creates for regional economies.
Business interruption remains the top concern within natural catastrophe risks at 60%, followed by damage to corporate assets and real estate at 53%, with climate change now ranked as the fourth most important global risk overall in the Allianz survey.
Supply chain disruptions from extreme weather events are increasingly affecting businesses far beyond the immediate disaster zone, with the interconnected nature of global commerce meaning a typhoon in Southeast Asia or floods in Australia can halt production and delivery schedules across continents.
The Allianz report surveyed 3,778 risk management experts across 106 countries, with responses from CEOs, risk managers, brokers, and insurance experts providing a comprehensive view of the corporate risk landscape heading into 2026.

Sources

You should be concerned if…

Manufacturing and logistics operations in APAC:
Businesses with production facilities, warehouses, or critical supply chain nodes in typhoon-prone regions of Southeast Asia, flood-vulnerable areas of South Asia, or bushfire-exposed zones of Australia face potentially uninsured losses that could threaten operational continuity and financial stability.
Property and infrastructure investors:
Real estate developers, infrastructure funds, and asset managers with significant APAC portfolios may find valuations increasingly disconnected from actual climate risk exposure, particularly where insurance coverage assumptions prove unrealistic or unavailable.
Global supply chain dependencies:
Organisations sourcing components, raw materials, or finished goods from APAC suppliers should recognise that their partners’ uninsured weather losses become their business interruption risk, regardless of their own insurance position.
Financial institutions with APAC loan books:
Banks and lenders with exposure to APAC commercial real estate, agriculture, or manufacturing sectors face credit risk from borrowers experiencing uninsured catastrophic losses, particularly where collateral values may be impaired by climate events.

These items are generic assumptions. We recommend considering your own unique risk landscape against your critical dependencies. If you don’t know what they are, get in touch.

Preventative actions

Conduct granular climate exposure mapping

Move beyond generic regional assessments to asset-level climate risk analysis. Identify which specific facilities, suppliers, and logistics routes face flood, typhoon, wildfire, or extreme heat exposure, then quantify potential business interruption duration and cost under realistic disaster scenarios.

Stress test insurance assumptions

Review existing policies with a critical eye toward actual coverage triggers, exclusions, and limits. Many businesses discover post-event that business interruption coverage has waiting periods, contingent business interruption has insufficient limits, or parametric triggers don’t match actual loss scenarios.

Build supplier redundancy in exposed regions

Develop qualified alternative suppliers outside the primary climate risk zones affecting your current supply chain. Negotiate contracts and logistics arrangements that can be activated rapidly when disasters strike primary suppliers.

Establish climate contingency reserves

Given the protection gap reality, budget for self-insured climate losses as a normal cost of APAC operations. Create dedicated reserves or access to liquidity facilities that can absorb uninsured losses without threatening core business viability.

2. Geopolitical: Global Risk Landscape Fractures as Economic Warfare Eclipses Traditional Threats

Note: We will be producing a separate deep-dive podcast episode examining the full World Economic Forum Global Risks Report 2026 in detail in a coming week.

The World Economic Forum’s Global Risks Report 2026 identifies state-based armed conflict as the top short-term risk, driven by over 50 conflicts worldwide claiming approximately 200,000 lives during 2024, the highest annual toll in nearly three decades.
Geoeconomic confrontation now ranks as the second most severe short-term risk globally, with economic measures such as tariffs, sanctions, and investment screening increasingly weaponised as tools of geopolitical competition, fundamentally reshaping global trade and investment patterns.
Environmental risks dominate the long-term outlook, with extreme weather events ranked as the most severe risk over a 10-year horizon at 41% of expert responses, followed by biodiversity loss and ecosystem collapse at 39%, and critical change to Earth systems at 36%.
The report introduces “fractured foundations” as a key theme, highlighting how erosion of trust in multilateral institutions, fragmentation of global supply chains, and declining international cooperation create compounding vulnerabilities across economic, technological, and environmental domains.
Misinformation and disinformation rank as the third most severe short-term risk, with AI-enabled synthetic content and coordinated information operations increasingly difficult to detect and counter, threatening democratic processes, market stability, and corporate reputations.
The WEF surveyed over 900 experts across academia, business, government, and international organisations, with respondents warning that the convergence of multiple risk categories creates cascading scenarios where environmental stress triggers conflict, which disrupts supply chains, which accelerates economic fragmentation.

Sources

You should be concerned if…

Export-dependent economies and businesses:
Nations and companies heavily reliant on trade with major power blocs face increasing pressure to align with one side or risk market access restrictions, tariff escalation, or exclusion from critical supply chains as economic measures become standard geopolitical tools.
Technology and semiconductor sectors:
Firms in strategic technology industries face expanding export controls, investment screening, and supply chain localisation requirements that fragment previously global markets and require duplicative R&D, manufacturing, and compliance infrastructure.
Commodity and energy traders:
Businesses exposed to global commodity flows face heightened sanctions risk, payment system fragmentation, and logistics disruptions as resource access becomes intertwined with geopolitical alignment and economic warfare measures.
Multinational corporations with diversified operations:
Organisations operating across geopolitical divides must navigate increasingly incompatible regulatory regimes, data localisation requirements, and reputational risks from association with either bloc in contested markets.

Preventative actions

Map geoeconomic exposure across operations

Identify which revenue streams, supply relationships, and market access points depend on continued geopolitical stability or specific trade relationships. Quantify exposure to tariff escalation, sanctions expansion, or market access restrictions under realistic fragmentation scenarios.

Develop bloc-agnostic operational capabilities

Where feasible, build redundant capabilities that can serve different geopolitical blocs independently. This includes localised supply chains, regional data infrastructure, and market-specific product variants that reduce dependency on cross-bloc flows.

Establish geopolitical monitoring and scenario planning

Move beyond reactive crisis response to continuous monitoring of trade policy developments, sanctions announcements, and diplomatic shifts. Develop decision trees for operational adjustments triggered by specific geopolitical escalation thresholds.

Diversify currency and payment system exposure

Reduce concentration in any single payment infrastructure or reserve currency. Establish relationships with financial institutions across multiple jurisdictions and develop capabilities to settle transactions through alternative mechanisms if primary channels become restricted.

Quick snippet stories

Healthcare Sector Faces Perfect Storm of Cyber Threats and AI Integration Risks
Australia’s healthcare sector faces escalating cyber risk as the value of patient data rises and rapid AI adoption expands attack surfaces. Legacy medical devices with weak security now sit alongside AI tools processing sensitive health records, while ransomware groups deliberately target healthcare to exploit the consequences of disruption. To reduce exposure, organisations must adopt zero-trust principles, rigorously assess AI vendors, and isolate unpatchable medical devices on segmented networks.
Main link to resource
Resilience Debt Accumulating as Organisations Underestimate Recovery Complexity
Dell Technologies research highlights growing “resilience debt,” where organisations prioritise prevention and detection but underinvest in recovery, leaving them unable to restore operations quickly after an attack. This gap often only emerges during real incidents, when backups fail, recovery plans are untested, or dependencies cause delays. Closing it requires realistic recovery exercises, proven backup restoration tests, and clear runbooks that assume systems and staff may be unavailable.
Main link to resource
Energy Infrastructure Cyber Attacks Intensify Amid Geopolitical Tensions
Cyber attacks on energy infrastructure are increasing as nation-state and criminal actors exploit the sector’s critical role and weak operational technology security. Legacy OT systems prioritise safety and reliability over security, while once-isolated networks are now connected for efficiency, increasing exposure and the risk of physical damage. Energy operators must assess OT security, segment IT and OT environments, deploy industrial-grade monitoring, and plan incident response with physical safety in mind.
Main link to resource
Critical Vulnerabilities in Anthropic MCP Server Enable Remote Code Execution
Security researchers have found critical vulnerabilities in Anthropic’s Git Model Context Protocol server that could allow attackers to run arbitrary code and compromise AI development environments. The issue underscores wider risks across fast-growing AI infrastructure tooling, where security often lags rapid deployment and complex integrations create new attack paths. Organisations should urgently apply patches, limit network access to AI systems, and monitor for suspicious activity indicating exploitation.
Main link to resource
Security Leaders Report Misalignment Between Investment Decisions and Actual Risk
Research from Expel shows organisations often misalign cybersecurity spending with real attack patterns, driven more by marketing, compliance, or executive preference than evidence. This leads to overinvestment in unlikely threats while common attack paths remain weak. Security leaders should adopt data-driven investment models, benchmark defences against actual sector attacks, and frame risk in business terms to guide better board-level decisions.
Main link to resource

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