Political risks and contingency risks were pioneered in the Lloyd's market and are today among the most important lines of business we underwrite.
Economic confrontations between major powers is the most concerning risk for 2020, according to the World Economic Forum Risk Report of 2020. China and the US continue their trade deal stand-off as both countries to prioritise domestic trade over global supply chains.
Today’s risk landscape is being shaped by an unsettled geopolitical environment. Countries that have been particularly hard hit by the COVID-19 pandemic, such as those who are heavily dependent on the tourism and/or retail sectors or where death rates have been especially high, are at higher risk of civil unrest. The on-going threat of terrorism continues to cast a heavy shadow over many regions.
New centres of power are forming. As the Trump administration retracts US commitment to organisations such as the WHO and Nato, there is opportunity for China to increase its multilateral voting power. With India and Indonesia predicted to be the third and fifth largest global economies respectively by 2024, the historically Western dominated global leadership model is fading.