With strikes, riots and civil commotion (SRCC) around the world expected to rise, businesses need to remain vigilant about the different threats this heightened risk environment can pose, as this can result in significant loss of income, according to an AGCS report.
Specialist insurance can help protect companies against damage resulting from political violence, as well as any interruption to the business. Policies can cover civil war, SRCC, terrorism and war, the insurer added.
Analysts highlighted that anger over growing social inequality and the cost-of-living, foundering faith in governments and institutions and increasingly polarised politics, together with a rise in activism and environmental concerns, are the main factors expected to fuel ongoing SRCC incidents globally.
According to the Verisk Maplecroft Civil Unrest Index, civil unrest risks rose in over 50% of countries between Q2 and Q3 2022 alone, out of 198 countries, 101 saw an increase in risk.
Since 2017, more than 400 significant anti-government protests have erupted worldwide. Analysts commented that it is not surprising that ‘political risks and violence’ ranks as a top 10 peril in the Allianz Risk Barometer in 2023.
They also noted that while the Ukraine war is a major factor in this ranking, the results also show that the impact of SRCC activity ranks as a political violence risk of top concern with a combined score of almost 70%.
Unrest is now spreading more quickly and widely thanks in part to the galvanising effect of social media. This means multiple locations can be impacted, potentially resulting in multiple losses for companies, AGCS explained.
Such events are also lasting for longer – almost a quarter of the 400 significant anti-governments protests since 2017 were in excess of three months – helping to ensure financial costs are mounting.
Reported damages from just six civil unrest events around the world between 2018 and 2023 resulted in at least $12bn in economic/insured losses.
“Incidents of strikes, riots and civil commotion have not only increased in recent years, they are also becoming more intense and catastrophic. These types of events are making our era one of uncertainty,” said Srdjan Todorovic, Head of Political Violence and Hostile Environment Solutions at AGCS.
“We have seen multibillion-dollar loss events in the US, Chile, and Colombia. The threat is changing, and although many of the reasons for it are universal – whether economic, political, or environmental – it can play out differently in different regions, with various levels of violence and disruption.
“Operational and security management within organisations should view the current climate as a catalyst for evaluating best practices and policies around preparing locations and employees for potential civil unrest and building resilience.”
