A significant rise in riots, demonstrations and vandalism, as terrorism has concurrently declined, mean civil unrest is now the biggest political risk for companies, according to Allianz Global Corporate & Specialty (AGCS).
The assertion was made in the latest issue of its Global Risk Dialogue publication.
“Fortunately, large-scale terrorism events have declined drastically in the last five years,” said Bjoern Reusswig, head of global political violence and hostile environment solutions at AGCS.
“However, the number, scale and duration of riots and protests in the last two years is staggering and we have seen businesses suffering significant losses,” he added.
“Civil unrest has soared, driven by protests on issues ranging from economic hardship to police brutality, which have affected citizens around the world. And the impact of the Covid-19 pandemic is making things worse – with little sign of an end to the economic downturn in sight, the number of protests is likely to continue climbing.”
Businesses should now review their business continuity plans to cope with “soaring” civil unrest that is likely to be exacerbated by the Covid-19 pandemic, according to the carrier.
AGCS highlights recent research by Verisk Maplecroft that finds 75 countries across the world are set to experience an increase in protests by late next year.
Of these, more than 30 countries, largely in Europe and the Americas, will likely see significant activity, according to the research.
It says planning to mitigate political violence risks is key, particularly for exposed sectors such as retail.
AGCS added that business continuity plans typically only focus on national catastrophes, but there is a “growing need” for them “to address political disturbances and other types of disruption like cyber incidents”.
“Having defined and tested procedures in place is crucial – these should focus on staff, clients and include general communication and social media plans,” the publication says.
Its Global Risk Dialogue also explains that political violence caused “significant” insurance claims last year and suggests companies should take a look at their insurance policies. AGCS has seen already and uptick in demand for specialist political violence covers.
“Previously this coverage was seen as a ‘nice to have’ for clients and ‘nothing to be overly concerned about’ by insurers. However, this has changed since 2018, as both the frequency and severity of these events has increased significantly. We see growing interest and demand for political violence covers from companies,” said Reusswig.