Businesses should prepare for a rise in civil unrest as the cost-of-living crisis follows hard on the heels of the COVID-19 pandemic, according to a new report by Allianz Global Corporate & Specialty (AGCS).
Allianz Risk Consulting’s current Civil Unrest Risk Bulletin said strikes, riots and violent protest movements pose risks to companies because in addition to buildings or assets suffering costly material damage, business operations can also be severely disrupted with premises unable to be accessed, resulting in loss of income.
AGCS head of crisis management Srdjan Todorovic said, “Civil unrest increasingly represents a more critical exposure for many companies than terrorism. Incidents of social unrest are unlikely to abate any time soon, given the aftershocks of the pandemic, the cost-of-living crisis, and the ideological shifts that continue to divide societies around the world.”
The UN has warned of the destabilising potential of disrupted supply chains and surging food, fuel and fertilizer prices, particularly in the context of Russia and Ukraine representing around 30% of the world’s supply of wheat.
Global risk analytics firm Verisk Maplecroft sees a rise in civil unrest as ‘inevitable’, in middle-income countries, which were able to offer social protection during the pandemic but will now find it difficult to maintain that level of spending as the cost-of-living surges.
The influence of social media networks plays an increasing role in mobilising protesters and intensifying social unrest. M