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From geopolitics and trade tensions, to climate disruption, infrastructure strain, and the rise of AI-driven threats; the Global Risks Report 2026 is a wake-up call for companies that still treat uncertainty as temporary.
Tehmina Kaoosji speaks with Teresa Wong, Chief Risk Officer and Head of Sustainability Risk at Zurich Malaysia, to break down what this new era of competition means for Malaysian businesses and how to prepare before the next shock hits.
Tehmina Kaoosji speaks with Teresa Wong, Chief Risk Officer and Head of Sustainability Risk at Zurich Malaysia, to break down what this new era of competition means for Malaysian businesses and how to prepare before the next shock hits.
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00:00Hello and welcome to Nyaga Spotlight with me Tamina Koushi. Nyaga Spotlight takes us through
00:10the week in economic analysis and future affairs. Now today on future affairs,
00:15Spotlight is on global risks. So geopolitics in 2026 has certainly become harder to predict
00:22and businesses are having to navigate more pressure from more directions all at once.
00:28The Global Risk Report 2026 analyzes that shift in sharp focus, looking at the reality companies
00:36are facing right now with geopolitics, climate disruptions, strained infrastructure and fast
00:43moving technology. Risk has thus moved to the core of everyday decision making. Now this report draws
00:50on rich insights from more than 1,300 experts and over 11,000 business leaders across 116
00:58economies. And the takeaway is clear. Instability is not occasional, it is actually becoming part
01:04of the operating landscape for business. So for Malaysia as a country, an economy built on trade,
01:11regional supply chain fundamentals, the real challenge is how businesses will stay strong
01:16when these shocks overlap. Economic, environmental and digital. And of course resilience has to become
01:24something which is not only meticulously planned for, but also costed for. Joining me now in the
01:31studios for this most interesting discussion and timely one too is Teresa Wong, Chief Risk Officer at the
01:38General Segment and Head of Sustainability Risk at Zurich, Malaysia to help us understand what 2026
01:44demands and how companies can prepare for what comes next. A very good morning to you, Teresa. Thank you for
01:51making time. Good morning, Tamina. It's my pleasure to join you here. Teresa, so it's a really timely
01:57moment to have a look at risk shift for businesses and what it's going to look like for the rest of
02:042026. So tell us a little bit more about, of course, the report itself and the top risk shift that
02:12businesses are looking at for 2026. Yeah, so the global risk report that came out recently, I think it's
02:20very timely as it comes out in the first quarter of the year. And it focuses everyone on what are the
02:28risks assailing us in the course of our ordinary lives, as well as, you know, from a business perspective
02:34and corporate organizations. We really need to see what we need to look at risk as risk for the future. And so far as a
02:43strategic terms, we need to plan for the future because we need to be resilient business businesses in order to
02:52support our local economies as well, right? Absolutely. I think the key shift in the 2026 global risk report is the
03:00growing interconnectedness of risk. We no longer look for isolated threats or just incidents that happen.
03:11Or sectoral vulnerability. Yes, correct. So it's a combination of risks that reinforce each other. So for instance,
03:19a geoeconomic confrontation is certainly at the forefront now. But the ripple effects that emanate from these
03:28disruptions, there's disruptions, right, to supply chains, economic instability that businesses must brace
03:34themselves for. For Malaysian companies, this interconnectedness, nature of risk holds a particular
03:41significance as its highly open economy. Malaysia is especially susceptible to global shocks, which can
03:51manifest rapidly through true disruptions. And so far as shifts in labour markets, maybe even
03:58fluctuations in investments, as we can see, you can see your up and down. That's right. And then you
04:04suddenly, you know, it's a systemic problem, right? You feel that. So my advice to businesses is to move
04:12beyond the normal assessment of individual risk, which they are so totally focused on on a daily basis, right? Sure. And
04:20adopt a more comprehensive perspective, one that considers how various risks may interact, and also
04:26potentially throughout the organizations. So this preparedness basically is what businesses should
04:33adopt in a more human centric manner. Combine a scenario based approach, and then explore how people in
04:42operations can also be affected can also be affected, and make sure that when that occurs,
04:49they are resilient enough to brace themselves and also make sure that they continue to be in operations.
04:57Right. Thank you, Teresa, for the insight so far. We take a very brief break, and we'll be right back after that.
05:03Stay tuned for the Rusty Interview Looking at Global Risks in 2026 and beyond.
05:09Kementerian Pendidikan bertanggungjawab sepenuhnya terhadap keselamatan murid dan pelajar
05:21sewaktu mereka di sekolah.
05:23Malaysia dan Korea Selatan terus memperkukuh kerjasama dalam bidang teknologi hijau dan
05:29kecerdasan buatan AI menerusi pelaburan dua syarikat utama Republik itu.
05:33SPRM akan meneliti dan menjalankan siasata sekiranya. Dapat unsur rasuah dalam pelaksanaan
05:39projek Erotrain di KLIA yang dilaporkan sering mengalami gangguan perkhidmatan.
05:45Tarif on imports of products from China reaching up to 145%. Tarif on the rest of the world are sitting at 10%
05:56with the potential for reciprocal tariffs to be reimposed within 90 days.
06:01Kujungan rasmi Presiden China ke Malaysia ini menunjukkan komitmen kedua-dua negara
06:07untuk meningkatkan hubungan diplomatik ke tahap yang lebih strategik.
06:23Welcome back to Niagara Spotlight. Still with me Tamina Kauji and getting right back into
06:27the conversation with Teresa Wong of Zurich Malaysia. So Teresa, as you were mentioning risk is no
06:34longer individual, it's multiple, it's cascading and I think we cannot desist from speaking about the
06:41fact that the wider geo-economic risks are of course around tariffs, sanctions and also strategic
06:47competition. So how is this already showing up in corporate risk decisions from the very deep
06:55insights that come out of the report? Truly, tariffs was like on everyone's lips.
07:01Sure, an entire year plus, right? Correct. And in today's landscape, basically geo-economic tensions,
07:08they are significantly impacting corporate decision making. So companies become more and more cautious,
07:15not because they are risk-averse, but basically because the cost of making a wrong decision has
07:22multiplied serious ramifications. Risk and compliance conditions considerations are moving upstream
07:29instead of reacting to issues after they arise. And firms now embed risk into checks,
07:38checkpoints where the decisions they make, are they applicable to the moment and also what decisions they
07:48need to make for the future. This involves additional reviews, you know, documentation, which is very,
07:55very important because of audit trails and approvals as part of the business as usual.
08:01So I think the supply chain continuity is also a very key strategic consideration for Malaysian businesses now,
08:09in particular paying more attention to supply chain risks and the exposure to disruptions beyond
08:16immediate control. This is especially due to Malaysia's economic profile where disruptions in key supply
08:26chains are a top concern. Absolutely. So companies are becoming more selective about long-term commitments
08:34and partnerships. They are re-evaluating their investments, their exposures to risk and flexibility
08:41and optional decisions are increasingly valued alongside the cost, efficiency and because companies
08:49basically want to seek resilience in uncertain environments. The interconnected nature of this risk
08:57will develop and evolve into a change, for instance, changes in sourcing which affect cost structures,
09:06which also in turn impacts pricing considerations and ultimately employment decisions. This cascading effects
09:17how geo-economic risks intertwine with broader business strategies.
09:23Exactly. So perhaps if at this point I think it's important if you could perhaps help us to highlight what kind of blind spots
09:31are you predicting or seeing amongst Malaysian firms that may still be assuming that trade flows will remain quite frictionless.
09:41No longer a truism though, right? Through Malaysian businesses, they assume that they are insulated from trade disruptions but the reality is that risk across industries and even within sectors is coming up, right?
09:58While manufacturing and export-oriented firms may feel the immediate effects, so local businesses that produce for local consumption,
10:09Right. They may feel that they are insulated against that. But the reality is there are a lot of manufacturers who produce in the supply chain…
10:19Yes, your source materials.
10:20…to export. And because of that, they need to make sure that they comply. For example, climate and sustainability, when you export to the EU, so if you're not a direct exporter, you say, I'm insulated.
10:35But basically that's not true. Because when you supply to a multinational that exports to the EU or US or even the UK, there are many regulations and requirements that will disrupt your supply.
10:49Or that at least have to be considered, even if it's supposedly a pretty smooth sailing quarter, right?
10:55Right. Yeah. And that would bring a lot of disruptions to your predicted or assumed revenue or projected revenue for the year.
11:04And therein lies the issues for challenges. So these upstream suppliers, they've got higher costs and also data reporting pressures because of ESG requirements.
11:18And key mistakes that companies make is assuming ESG as a reporting criteria rather than benefiting from it by ensuring that you could lower GHG emissions because you've implemented ESG into your manufacturing operations.
11:35Or even perhaps improve reputational management as well since you are known for delivering.
11:42Yes. And in order to stay resilient, companies should expand their view of the supply chain risk and embrace transparency.
11:51So reliability and flexibility to adapt is paramount.
11:55Yeah, absolutely. And so moving in from there into the fact that financial strain and corporate resilience are perhaps the largest intersection that we will be experiencing over 2026.
12:08Teresa, tell us about basically what stress points are of biggest concern when it comes to Malaysian balance sheets.
12:16Basically, financial strain isn't just caused by a single factor.
12:22It depends on how exposed a business is to the interconnectedness of the global economy, for which the GRR, the Global Risk Report, has highlighted there's so much interconnectivity that it should not be overlooked.
12:37And the pressure often doesn't come as an immediate shock, but rather in gradual shifts that will eat away a company's ability to adapt.
12:46So in this environment, the main concern isn't one specific item on the line within the balance sheet, but whether a company has enough flexibility to adjust to changing conditions without jeopardizing long term stability.
13:03The companies that rely on stable assumptions, they're often the first to feel the strain, right?
13:13But those with buffers and clear visibility tend to manage disruptions more effectively.
13:19And resilience today basically is about adapting to multiple pressures at the one point, not avoiding them altogether, but being able to pivot and respond quickly when volatility and uncertainty arise from multiple disruptions.
13:39Exactly. Now, it was also quite interesting to look a little deeper when I had a look at the report's economic reckoning, which was based around three simultaneous pressures.
13:49So particularly for balance sheets, it talked about high debt refinancing needs, asset price or even industrial bubbles, and also the risk of boomerang inflation.
14:02It was also interesting that the report was bold and very articulate in predicting a possible worst case scenario, which might be global tariff imposition, right?
14:15So this would, of course, completely change the operating landscape for any business, regardless of whether you are a larger partner, a smaller partner or otherwise.
14:26Yeah. All right.
14:28So, Teresa, from there, moving into having a look at climate and infrastructure risk.
14:34So climate and infrastructure risk is now a lot more immediate.
14:39We have actually seen a lot more floods occurring all the way to if it's not floods.
14:45We also have heat stress involved.
14:47So how is Zurich seeing physical climate risk shift from long term to more of an ongoing operational issue?
14:56So physical climate risks are very quickly felt, for instance, like the floods that assail us.
15:04I think in particular, the December 2021 floods, we had a huge loss, more than six over a billion losses.
15:14But we discovered that the economic losses were not totally insured.
15:19And this brings a call to consumers on the ground to be more aware that they should be looking to insurance as a risk transfer, as well as mitigating their own balance sheets as well, the portfolio and the profitability of their businesses.
15:38And only one third of that six over a billion was insured.
15:43All right. So that that is a staggering amount.
15:46Very, very cognizant of.
15:47And also considering the fact that were the floods that occurred in December last year, not too long ago, we also had repeated escalating patterns since about 2021 onwards, right?
15:59Correct. So from the perspective of an insurer and why we should be aware and support our customers.
16:10Every time floods affect their livelihoods and business continuity plan from within ourselves, as well as to support customers are also very important.
16:23So the speed of the response rate, particularly when customers are affected by floods.
16:31So we do have flood support where basically the flood claims are tackled at the ground level.
16:42Right. So this is to alleviate the financial assistance that customers would need on the ground.
16:49And this is through our flood aid trucks.
16:53And I think what's most important now, perhaps, is that reframing climate risk all the way from heat stress to flood damage outside of the usual paradigm,
17:04which is that this is only something which especially impacts rural or, you know, non-urban areas.
17:13Zurich's findings, of course, center more around the urban landscape, right?
17:19Yes. So from a perspective of how we view flood, it's not just in the rural areas, but there are also urban vulnerable communities.
17:30And together with the Zets Rake Foundation as a group, we have an urban climate resilience program where we focus on local initiatives on the ground level with these communities.
17:43So we support two communities in Kuala Lumpur and also another two communities in Malacca, namely the PPR Beringin and Kampung Pasir in Kuala Lumpur.
17:56Right. And Kampung Pasir in Kuala Lumpur and Kampung Pasir in Malacca.
18:01So from these programs, when climate assessment is conducted, we start with focus groups and actually go to the grassroots levels to understand what are the pain points that these communities encounter when they have not just floods, but also heat waves.
18:19Fair enough, because sometimes it actually happens simultaneously back to back, perhaps even within one month cycle, right?
18:28Correct. Where heat stress is so severe that the elderly cannot sleep.
18:35Yes. And that will ensue with a whole host of other issues. So the initiatives that we would move for and put forward basically help to strengthen resilience in communities and adapting to both heat stress as well as a flood.
18:53Absolutely. So thanks very much for sharing with us a little more about the on ground work that is happening, which is of incredible value to local communities.
19:02But moving now, Teresa, into looking at critical infrastructure and the connection to business continuity.
19:10So tell us a little more around perspectives for infrastructure disruptions, which can also be occurring.
19:16We're talking about multiples. We're talking about weather, even cyber spillovers, logistics breakdown.
19:24What could a credible resilience plan look like for organisations out there?
19:34Very key to resilience is communication. And that should cut across all functions within an organisation, not just isolated to the resilience manager or the business continuity manager.
19:49Because when disruptions occur, whether it's from weather events, cyber spillovers or logistic breakdowns, the resilience framework must be solid and activated in a way that is grounded in operational needs, not just, you know, something you put on pen and paper and then file it away and then dust it now and then.
20:11But basically, it should be a living document. And then it must have a realistic understanding how disruptions will happen.
20:23So we do business disruption testing, stress testing, stress testing as well.
20:32And our internal guidance allows us to recognise that weather events can not just affect only ourselves, but also our customers.
20:41And this is from the perspective of operations where, say, a flood occurs near our branches and customers cannot go to the branch to do their transactions or make their claims.
20:53Right. So and cyber spillovers can also disrupt connectivity to our core partners who cannot provide the service to customers. Right.
21:02And in so far as logistic or infrastructure breakdown, they can affect our claims servicing, just like I mentioned earlier on about why we have the flood aid trucks to support victims of our customers.
21:15During the emergencies. Yes. Yes.
21:16So it's also very interesting, Teresa, that you that you mentioned and emphasise stress testing, quite similar to, let's say, a fire drill.
21:24So I'm sure every organisation, they're on board with that side of it.
21:28But how do we normalise the mentality that you also need to stress test your resilience plans for businesses out there?
21:35What would be your message to them?
21:37Very truly, you need to make sure you have backup plans.
21:40OK.
21:41Right. So a very resilient infrastructure and so far systems concern enables you to carry on business as usual.
21:49And a very good example of that was during COVID-19, where we could mobilise all staff to work from home because we had a strong infrastructure,
21:59equip them with laptops and only essential services in the office, basically.
22:05But there was continuity of business. So it chives into why a business continuity plan should be resilient enough to withstand that.
22:15Non-negotiable.
22:16Yes. And you see the whole world evolving to borderless communications, right?
22:22You do not even need to fly anywhere, reduce your carbon footprint, but you can have a very decent conversation online with video, etc.
22:31Which was not possible for the multitudes 10 years ago.
22:35Absolutely.
22:36Yes.
22:37So from there, of course, I'm speaking about online.
22:39Where do you expect now from the online sphere, cyber risk has also evolved into AI driven risk.
22:46So where do you expect AI driven risk to be hitting Malaysian businesses first?
22:52And what ought we to be preparing for in the year ahead?
22:57AI risk comes because we all want to improve ourselves.
23:03Faster, stronger.
23:04And the brain is always thinking, trying to come up with new innovations.
23:09And from that perspective, it's got a lot to do with trust, right?
23:17You trust the system, you move with the system and you should be okay, right?
23:22But you see today, scams are happening because of the trust factor.
23:26Sure.
23:27And therefore, it's very vital that every consumer out there should be aware of what AI can help them with and what they should not do.
23:40Like click on the link because the automatic reaction is please click on the link and you just follow, you know?
23:46Follow almost blindly.
23:47Right, right, right.
23:48And they know to choose the rhythm of your makeup during the day to target maybe during lunch hour or you are in a rush and then you just click and that's it.
24:01Fallen prey to a scam, right?
24:03Exactly.
24:04But AI is here to help support us to move things faster for the future.
24:08It should be embraced and should not be thought of as, you know, this great…
24:13Something to avoid.
24:14Yes.
24:15Great black hole to avoid because you feel that there are risks.
24:19What is very important is to understand what is behind the AI.
24:24That's very important.
24:26For Malaysian businesses, governing AI use is very important.
24:31Should not avoid it.
24:32We should not avoid it.
24:33We should be accountable and human oversight verification of processes must not give way to immediacy.
24:41Like you want to be more efficient and you see a message from your boss and immediately you click on it, that's it done.
24:48So the human thought process which goes into verifying whether it's true, truly your boss or not, that is important.
24:57Exactly.
24:58So what this is actually speaking keenly of is, as you mentioned, everyone is exposed to this, be it in our work lives or in our personal day-to-day lives.
25:08It is evolving more as a multi-generational digital financial and media literacy challenge because this could be affecting someone who has just started off in their work years or even teenagers who may already be transacting online and purchasing things all the way up to retirees and those in their working age.
25:32So risk clearly is so much more contextual and connected overall.
25:39Perhaps to land the conversation, Teresa, what would be your final risk preparation message to businesses, organizations out there for 2026?
25:53Firms investing in awareness, governance and early response capabilities is very vital and it will be a better position to navigate and manage AI driven risks because technology is not going to fail to go backwards.
26:11It will not retrograde, it will just move forward and at a faster pace than any one of us can imagine.
26:17Right.
26:18So in everyday operations, we encounter AI and firms should embrace that as part of a more efficient driven process for the future.
26:29All right.
26:30Thank you very much for the conversation today, Teresa.
26:32Ending off, risk today is about how quickly the world is changing around us while dealing with these policy crises.
26:38The businesses that will endure are the ones that stay alert, are able to adapt early and also treat preparedness as part of business and operational strategy.
26:48My thanks to Teresa Wong of Zurich Malaysia for joining us today.
26:51That's all we have time for.
26:53Join us next week for more economic analysis and insights.
26:56I'm Tamina Kaosji signing off for now.
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