Aon’s new 2020 Risk Maps report suggests that three in five developed economies face the potential of strikes, riots and civil unrest in 2020.
The COVID-19 pandemic has deepened concerns of the potential for elevated costs and insured losses through civil unrest in countries that rely heavily on tourism and retail.
It’s also been noted that where there is a higher human toll from the pandemic, there will be a greater potential for civil unrest and government-focused protest. Although this is a risk that was already high prior to the pandemic.
COVID-19 will also test supply chain resilience, as economic nationalism in the form of expropriation, currency controls and trade restrictions will curb globalisation.
Additionally, economic consequences included are labour market disruption, consumer anxiety that restricts overall consumption, wider risk premia for equities and corporate debt, and restriction in corporate bond issuance and lending.
Vlad Bobko, head of Crisis Management, Global Broking Centre, Aon, said: “COVID-19 is shaping up to be one of the most disruptive, world-changing events in living memory. The pandemic has transformed the way we live and work, and new challenges have appeared across industries and territories. And in an increasingly complex and volatile business environment, informed decision-making has never been more important.”
He continued: “Through our Crisis Management practice, we have been supporting clients seeking to navigate these complex risks. Whether it’s insulating against government intervention in emerging markets, sovereign and private counterparty defaults, or protecting people and operations from the threats posed by civil unrest, terrorism and kidnapping, our goal is to help protect against – and mitigate – a host of client exposures.”
Aon’s report has found that almost half of all countries face some degree of terrorism risk in 2020. This ratio is found to be higher than last year and reflects a more widespread threat of terrorism, motivated by a range of extremist ideologies and causes.
Extreme right-wing terrorist attacks have increased infrequency for at least five consecutive years and have doubled globally in the last three years.
Henry Wilkinson, head of Intelligence & Analysis and director at The Risk Advisory Group, said: “The COVID-19 pandemic is a turning point in global risk. Countries with an underlying risk of instability are likely to see negative trends accelerate as restrictions lift globally, with unrest and terrorism risks likely to rise. Old as well as new geopolitical fault lines are unsettling and becoming flashpoints, making crises and conflicts between states even more likely than in 2019. Businesses will need new strategies and tools to manage their exposure to survive and thrive. High-quality intelligence advice and data is a critical investment.”
The main targets for extreme right-wing attacks are multinational businesses, particularly within the technology, banking and media sectors.
This highly disruptive unrest has accelerated upward in global businesses’ risk profiles.
