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Outlook grim: top insurance risks for 2018

By SmartCoverage Team on January 19th, 2018

A new report from Insurance Business Canada expresses some grave industry concern about the growing “interconnected and systemic” nature business, politics and societies have around the world.

“Results of a survey of leaders in the World Economic Forum (WEF) Global Risks Report 2018, show that 59% think 2018 is going to be the most ‘dangerous’ year yet.”

The survey found that a whopping 93% of respondents think that geopolitical risk will increase significantly this year, going on to impact the economic foundation of society at large.

Margareta Drzeniek Hanouz, head of economic progress for the WEF, fears that we are reaching a tipping point “that could bring a number of systems to a brink and could have potentially systemic and catastrophic consequences for humanity and the economy as a whole.”

The WEF argues that these grave concerns present an opportunity for politicians to invest in scientific and technologic advancement, which could go on to address these pressing environmental and economic challenges.

Significant risks this year

The report names a flurry of increasing environmental risks to acknowledge, including: “extreme weather; biodiversity loss and ecosystem collapse; major natural disasters; man-made environmental disasters; and failure of climate-change mitigation and adaption.”

The extreme weather events connected to other risks expose the world's vulnerabilities in both withstanding environmental impact and recovering from those impacts, as we have seen very recently.

Zurich Insurance Group risk officer Alison Martin laments: “Unfortunately, we currently observe a ‘too-little-too-late’ response by governments and organizations to key trends such as climate change.”

Cyber risk

The Global Risks Report highlighted cybersecurity as a significant risk for 2018, too:

“Cyber risk has not only struck the corporate sector … but has also impacted infrastructure, the geopolitical sphere, economies and societies more generally.”

Expert panellists further that these risks are only intensifying by their close proximity to each other; they also explain how “the scale and sophistication of cyberattacks is going to grow, fueled in part by geopolitical friction.”

In essence, these reported risk factors, when combined, can operate like a domino effect or chain reaction. One natural risk bounces from environmental catastrophe to intense political rhetoric, to cyber risk, which then impacts singular economies and their people.

Increasing dependence on technology, both for the individual and the business, requires a certain defense that anticipates cyber-attacks and protects users.

Concurrently, the increasing volatility of the environment, in the wake of recent and progressive natural disasters, requires more stable physical defenses and on-board governments that anticipate risk and mitigate damage.

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