What are the main global risks predicted for the future?
Today’s world is highly connected and there are several challenges that now impact economies and organisations globally rather than regionally. Understanding these connections enables organisations to plan and build resilience in to your business and supply chain risks.
In its latest report, the World Health Organisation (WHO) lists the biggest global health challenges in the next decade as; access to medicine, climate change, conflict, inequality, infectious diseases, epidemics and harmful products.
We expand on 3 of these risks below.
Notwithstanding the result of December’s general election, Brexit uncertainty still hangs over us. The reality remains that Britain’s trade arrangements with its traditionally closest partners will remain in a state of flux for some time to come.
Added to this,Donald Trump will be contesting an election once again. Whilst tension with Iran and China only create more global uncertainty.
There is also more wide ranging and deep-rooted political activism across the world, exemplified by the protests in Hong Kong that have been running since June together with the Yellow Vest protests in France. Both protests were triggered by one change and they soon expanded their remit and list of demands, even when the original change had been reversed.
We have seen the rise of the Extinction Rebellion and Greta Thunberg – political activism to drive action on climate change. The increased pressure to decarbonise our energy industries and economies has climbed to top of the risk agenda.
Fossil fuels have been identified and targeted for their negative contribution to the environment. Consumers, some businesses, arts organisations, investors as well as several insurers are withdrawing support for industries involved with fossil fuels.
Mark Carney delivered a clear statement at the UN Climate Action Summit last year, saying:
“Changes in climate policies, technologies and physical risks in the transition to a net zero world will prompt reassessments of the value of virtually every asset. The financial system will reward companies that adjust and punish those who don’t.”
With the impact of climate change being seen in the UK and overseas there has been a massive increase in the number of adverse weather events that have required multi-agency approaches to support people in highly challenging situations. Hurricanes, wildfires and floods cost the world $232 billion in 2019 and losses for business and the economy are only expected to increase, because of a decade-long rise in natural catastrophes with direct links to climate change.
Ernst Rauch, Munich Re’s chief climatologist stated,
“we expect 2020 to have increasing losses from weather-related disasters, a trend that we have been observing over the last decade”.
In Australia, a prolonged period of extremely dry and unusually hot weather has added to the severity of bushfires in the country and can likely be attributed to global warming. Rauch added:
“What climate change does is amend probabilities, so if we see an increasing probability of large losses from wildfires that indicates that climate change is contributing,”
Epidemics and Pandemics
Our world is truly global, where people and goods travel thousands of miles across continents daily, giving rise to the potential threat of epidemics and more deadly pandemics. In 2003, China alerted the world to Sars. This alert came after three months of fighting the infection. Over the course of the following year, Sars infected nearly 8,000 people, killing 10% and spreading to 17 countries before it was stopped.
With over 80,000 confirmed cases and over 2,600 deaths, the Coronavirus is being closely observed. The virus originated in Wuhan in China, a major transport hub, governments and health officials across the globe are on high alert to contain and where possible, diagnose symptoms early.
We are always interested to hear your views so if you have any questions or comments on this article, please get in touch with your dedicated insurance broker at Griffiths & Armour or alternatively, contact Troy Johnson below:
If you found this article useful, you may be interested in the following insurance solutions:
Protection against the loss of income as result of being unable to trade due to an unexpected interruption.
Protection in the event of a data breach or a malicious cyber attack.