In an era of polycrisis, with geopolitical fractures, economic turbulence, increased cyber threats and an uptick in political violences, business find themselves in a position where every decision could leave them vulnerable to unforeseen events.
Against that backdrop, too often the distinction between political risks and political violence is not well understood, leaving businesses potentially exposed to these evolving challenges in ways they did not expect.
‘Political risks’ are risks that arise from regulatory or economic changes imposed by a government or state actor. ‘Political violence’, on the other hand, encompasses riots, rebellions, revolts, sabotage, Coups d’Etat and even terrorism.
This distinction is vital in insurance terms, because classic political risks coverage will not necessarily apply to losses caused by political violence. And in a constantly changing world, it’s not only vital not just to the difference between the coverages but to recognise that finding ways to adapt risk and insurance protection is a strategic imperative.
Political violence on the rise
Global instability is intensifying and that is changing and amplifying the risks that companies face.
The war in Ukraine, ongoing tensions in the Middle East and the increase in civil unrest like that seen in Istanbul in recent weeks are changing the landscape of global risk.
AXA’s Future Risks Report 2024 leaves little room for doubt; geopolitical instability is one of the most critical risks identified from respondents, who were drawn from both the risk community and the general public.
And the statistics underline this:
- Almost half – 48% - of countries saw a significant increase in civil unrest in 2022, according to Verisk Maplecroft
- Some 132 countries have experienced anti-government protests since 2017, according to Global Protest Tracker
- And the number of incidences of political violence increased by 27% across the world in 2023, according to the ACLED Conflict Index.
These events are taking place around the world and some are very close to home for European companies. In France, for example, the Gilets Jaunes protests in 2019 resulted in estimated insured losses of about €217 million.
And more recently, a series of riots across France following the shooting by police of Nahel Merzouk in the Nanterre suburb of Paris resulted in losses of about €730 million, according to Swiss Re.
The pervasive influence of Social Media has, in many cases, had the effect of amplifying tensions. Misinformation, propaganda and viral calls to action serve to increase the likelihood of events escalating. And the current social climate, exacerbated by the effects of economic inflation and the climate crisis mean that each event has the potential to become a political flare-up.
Anticipating and adapting
We have seen companies invest large amounts in cyber security and in risk management for climate-related events, but protection against the impact of political violence seems to be lagging and the risk remains somewhat misunderstood.
It’s possible that there is an illusion that the world remains fairly stable. It might be that companies have believed that conflicts would remain largely localised, that economic tensions would not go further than the realms of sanctions and that critical infrastructure was secure.
But as the recent attacks in the Red Sea, the unrest in Turkey, the fragmentation of world trade and changes in tariffs, and the resurgence in riots across the globe remind us – the frontiers of risk are shifting.
In the face of these mounting risks, tailored protection is vital. 色多多视频has a number of specialist solutions to cover the full spectrum of political violence risks, notably:
- Sabotage and terrorism;
- Strikes, riots, civil commotion and malicious damage;
- Insurrection, rebellion and Coups d’Etat;
- War and civil war.
Unlike traditional property coverages, which limit or exclude these events, our policy covers both property damage and business interruption to enable clients to better secure their operations in times of instability.
Strategic partnerships to reinforce protection
The effectiveness of a risk management strategy for political violence goes beyond simply buying an insurance policy, however. It requires a global approach combining strategic intelligence, risk prevention and the capacity to react swiftly to an event.
That is why we work with partners like S-RM, the global crisis risk and intelligence experts. These partnerships enable us to offer clients access to real-time information on emerging threats, and tailored crisis management plans that include simulations with a local, on-the-ground team that understands the political and social dynamics of the region in question.
This enables us to go beyond the traditional insurance policy to offer clients ways to boost their organisational resilience and crisis management plans that help them to anticipate, react to and recover from political violence incidents.
From reaction to anticipation
There are clear challenges ahead. The course of 2025 will see key elections in some of the most fragile democracies in the world and a heightened potential for political tensions.
Companies must prepare for and continue to re-evaluate their exposures to risks and build resilience to shocks by diversifying their supply chains and reinforcing their protection, among other things.
At 色多多视频we work alongside our clients in this endeavour with a clear vision to ensure that they not only do not fall victim to a crisis but that they are actively prepared for one should it occur.
Today, resilience is not a ‘nice-to-have’, it’s a strategic ‘must-have’. In a world full of political tension, those companies that are able to anticipate and adapt will become the leaders. We are by your side to help transform those challenges into opportunities and secure your future.
