Sight Unseen

ARTICLE

Sight unseen:
Managing out-of-sight risks in South Korea

South Korea's export-driven economy is vulnerable to geopolitical changes—yet many businesses lack strong risk management structures to prepare for disruptions. Only 9% have firm plans to implement preventative risk measures, leaving them at risk of cascading failures.

Sponsored by

Client foreword

South Korea is home to over 51m people, the fourth largest economy in Asia and the 12th largest GDP globally. It is where ancient traditions meet cutting-edge innovation, home to a dynamic economy and a hub of technological advancements. Twenty-four-hour cities with skyscrapers, high-tech infrastructure and vibrant nightlife like Seoul and Busan stand alongside rural areas with rolling mountains, rice paddies and traditional Hanok villages.

South Korea's rapid innovative growth and influence have firmly established it as a crucial player on the global stage. Beneath the surface, however, hidden risks lurk, ready to challenge even the most astute executives.

This article developed by Economist Impact, sponsored by FM, uncovers the unseen threats that South Korean businesses face. From geopolitical tensions that ripple across borders to the unpredictable climate that ranges from monsoons to heatwaves to snowstorms. South Korea's history is a testament to resilience, with no greater example than that of its remarkable post Korean War recovery and growth.

So, whether you find the following article an eye-opener or confirmation of your existing hunches, consider it a trusted resource for 2025. It's your guide to navigating the hidden risks of doing business in South Korea, ensuring you're prepared for whatever this vibrant and complex country throws your way.

Sung Jun Kwon
Branch manager, FM Korea

Heavy exposure to global risks is an inescapable reality for South Korea’s export-oriented economy. For example, US-China tensions, the Russia-Ukraine conflict and hostilities in the Middle East are keeping Korean businesses on their toes. Adverse developments closer to home—such as recent political instability, an ageing population and extreme weather—are also causing anxiety. In the past six months, the country has experienced one of its worst snowstorms and its largest wildfires, causing significant upheaval. The above highlight how out-of-sight risks—those that fall under the corporate radar—can cause significant disruptions.

In a survey of C-level executives that we conducted in Asia-Pacific (APAC) in September-October 2024, 44% of respondents from South Korea say that most of the risks that have impacted their organisations in the past have been unexpected. Around three-quarters (76%) say that their businesses have taken major hits to revenue and profitability as a result. And over two-thirds (68%) say that their supply chains have been severely affected. As just one example, the global semiconductor shortage, which began in 2020 during the pandemic and lasted three years, caused substantial financial losses for South Korean automotive and electronic businesses. In June 2022, Hyundai Motor reported a 4.5% year-on-year decline in sales owing to production issues stemming from the shortage.

Continue reading the article by downloading the full PDF below:

More content:

REPORT

Sight unseen: navigating out-of-sight risks in Asia-Pacific

Unexpected risks are hitting APAC businesses hard—nearly half of surveyed leaders admit they were unprepared for major disruptions. This report uncovers the most overlooked threats and offers practical strategies to strengthen risk management and build resilience. Discover what you can do differently.

Read executive summary

INFOGRAPHIC

Unpacking the gaps in risk management

From climate shocks to trade restrictions, businesses are misprioritising key risks and paying the price. Our infographic highlights critical blind spots and offers actionable insights to help navigate out-of-sight risks.

Explore infographic

ARTICLE

Sight unseen:
managing out-of-sight risks in Australia

Australian businesses are facing data security breaches, extreme weather events and trade risks—all while 64% say poor-quality data is their biggest challenge in risk management. Without data-driven insights, can they truly prepare for the next crisis?

Read article
PROFILE

From engineering frontlines to
company leader

From chemical engineer to FM leader, James Thompson has worked in 28 countries, blending technical expertise with leadership to reduce risks and enhance client relationships.

Profile Image
PROFILE

Paving the way towards a more diverse workforce

Women hold just 29.2% of STEM jobs globally. FM’s Yong Seek Ying highlights the importance of gender diversity and leadership in driving change.

Profile Image

PODCAST

Confronting the elephant in the room: APAC climate risks

Podcast 1 ▶
Listen to podcast

PODCAST

Claim stakes: the unexplored world of property insurance claims

Podcast 2 ▶
Listen to podcast

PODCAST

Weathering the future: the case for rethinking how to climate-proof flood-prone Australia

Podcast 3 ▶
Listen to podcast
ARTICLE

Rooted in a rich history, FM sets its eyes on the future

Nearly 200 years ago, Zachariah Allen pioneered a revolutionary approach to risk and loss prevention. His belief in innovation and cooperation still guides FM’s strategy today. Discover how his legacy endures.

ARTICLE

Will climate risk shape Australia’s economic future?

Data-driven insurance has become an increasingly important piece of the puzzle in helping Australian businesses protect against multiple risks. This includes the pressing issue facing the country—the intensifying climate crisis.

Explore innovative risk management solutions and discover how FM helps businesses enhance resilience. Visit our website for expert resources and insights.

In the Asia-Pacific, FM is a licensed direct insurer in Australia, Hong Kong Special Administrative Region, New Zealand, Singapore and South Korea. For other locations in the region, such as China, India, Indonesia, Japan, Philippines, Malaysia, Thailand, Vietnam etc please contact us and we will be happy to explore your insurance needs through and in close collaboration with locally licensed insurers, our WorldReach Partners.

Visit website
Back to Top
Copyright © The Economist Newspaper Limited 2023. All rights reserved.