Insurers in Singapore more anxious compared to global counterparts amid rising risks of cyber crimes, AI, and macroeconomic uncertainty

SINGAPORE, 25 November 2025 – Technology disruption and macroeconomic uncertainty are driving higher levels of anxiety among insurers in Singapore compared to their global peers. Preparedness levels in managing identified risks are slightly lower than global benchmarks, according to Singapore-specific findings from the global report 'Insurance Banana Skins,' produced in conjunction with the Centre for the Study of Financial Innovation (CSFI).

Now in its tenth edition, the ‘Insurance Banana Skins’ report evaluates the most urgent risks facing the global insurance industry, based on perspectives from practitioners and observers around the world. The Banana Skins Index for Singapore rose to 3.44, compared to 3.22 globally, indicating a more cautious risk perception among local respondents in 2025.

The Preparedness Index for Singapore stands at 3.21, slightly below the global benchmark of 3.24. Singapore's unique position as an open economy may heighten its vulnerability to recent global shifts, making preparedness in these areas more challenging compared to other economies.

Consistent with global findings, Singapore respondents identified cyber crime as the number one risk. Cyber crime has consistently ranked among the top risks for Singapore insurers since 2017, and its elevation to first place in 2025 reflects the sector’s expanding technology footprint, deeper reliance on third-party and cloud ecosystems, and increasingly sophisticated threat actors who leverage generative AI to enhance the scale and speed of their attacks.

The survey also highlights the sharp rise of Artificial Intelligence (AI) as a broad concern for insurers in Singapore. Previously outside the top 10 local risks in 2023, AI has moved into the sixth-highest position, mirroring the technology’s rapid ascent globally, where it is among the top two risks for the first time. Beyond amplifying cyber threats, respondents identified broader AI challenges such as its dynamic development, which is difficult to monitor and spans multiple components and vendors. These evolving risks necessitate continuous evaluation and governance, underscoring the need for trust, control and assurance frameworks to evolve at the same pace as adoption.

Respondents also showed greater sensitivity to macroeconomic headwinds than global figures, reflecting Singapore’s status as a trade-dependent, globally connected financial hub, where tariff movements, currency divergence and capital-flow fluctuations have a direct bearing on operating confidence and strategic planning.

With technology-linked and macro-driven risks commanding greater immediate attention, human capital has fallen to fifth place in 2025, but remains among Singapore’s top five risks, where key challenges include the aging workforce, and competition for scarce data, engineering, and actuarial skills.

Said Ang Sock Sun, Insurance Leader, PwC Singapore:

“Insurers in Singapore stand at a crossroads where both continued and emerging challenges like cyber threats, macroeconomic volatility, and rapid technological advances demand a re-evaluation of traditional strategies. How do insurers not only stay resilient but thrive amidst such dynamic complexities? The focus must shift toward integrating AI-driven solutions, enhancing cyber resilience, and recalibrating economic strategies.”

“To stay ahead, insurers should not only align with regulatory compliance but also advocate for a risk-sensitive, future-oriented framework that balances innovation with protection. As anxiety levels remain high, collaborative foresight and adaptability will be the keystones that define success in securing a sustainable and profitable future for the industry."

For Singapore, the next phase of preparedness will be to operationalise resilience in cyber and AI, institutionalise macro and rate scenario agility, and execute tech transformation and leverage talent with disciplined governance for the most value-accretive change.

For more information or to download the Singapore insights, please visit our webpage here.

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Notes to the editor

About the report

The report, Insurance Banana Skins 2025, which with the 10^th edition of a biennial series that goes back to 2011, was conducted from June to August 2025, and is based on 698 responses from 42 territories. Singapore provided the second-highest number of responses, with 70 out of 698 participants in the global survey. The Singapore insights are based on this pool of responses.

The Banana Skins Barometer measures the average score given by each territory with 10 or more respondents to the 23 risks listed in the questionnaire. The higher the score, the greater is the implied “anxiety level”. The Preparedness Index measures the average response given to the question: “How well prepared do you think the insurance industry is to handle the risks you identified?” where 1=Poorly and 5=Well. The higher the score, the greater the implied level of preparedness. Note that both indices are "self-scored".