By: Luke Jones, Published on January 31, 2018 05:15 PM, Last Update on January 31, 2018 02:16 PM
A growing array of global risks are putting pressure on everyone, and insurance companies are tasked with ensure the risks to not overwhelms and turn into catastrophic events.
Business and political leaders are concerned by increasingly connected and systemic. A new survey published by the World Economic Forum (WEF) shows that 59% believe 2018 will be the most “dangerous” year on record.
The Global Risks Report 2018 shows the major concerns are geopolitical situations, such as political confrontation, economic collapses, state-on-state military conflict, and regional conflicts between major powers. 93% of respondents believe geopolitical risk will increase during this year, said Drzeniek Hanouz, head of economic progress, World Economic Forum, at a press briefing in London, UK.
“The pace of change and the interconnection between risks is accelerating. At the same time, many risks are becoming increasingly systemic in nature,” said Drzeniek Hanouz. “We are increasingly approaching tipping points that could bring a number of systems to a brink and could have potentially systemic and catastrophic consequences for humanity and for the economy as a whole.”
The WEF report also points to opportunities, despite the concerns. Insurers can improve as the global economy enjoys a good period. However, this could be offset by what are deemed as the biggest risks in 2018, namely environmental risks. Extreme weathers, ecosystem collapse, natural disasters, climate change, and other concerns are ever present:
“Extreme weather events were ranked again as a top global risk by likelihood and impact,” commented Alison Martin, group chief risk officer at Zurich Insurance Group. “Environmental risks, together with a growing vulnerability to other risks, are now seriously threatening the foundation of most of our commons. Unfortunately, we currently observe a “too-little-too-late” response by governments and organizations to key trends such as climate change.”