Two global risk reports were published last week and both support our analysis: Political risks are gaining in importance. While the World Risk Report of the World Economic Forum in Davos explicitly warns of a collapse of states as well as the use of weapons of mass destruction in the long-term perspective, the Allianz Risk Barometer now ranks the outbreak of political violence again among the top 10 business risks.
However, a closer look at the reports reveals that fear of political risks is often behind other mentions as well. For both the outbreak of pandemics and an intensification of climate change, the greatest concerns are social change such as growing inequality and distribution struggles within and between states.
In this context, the World Economic Forum as well as global management consultancies such as McKinsey urgently appeal to businesses to revise their risk management. Companies with a strong risk management culture not only record lower losses in claims, they are also superior to their competitors in terms of employee and customer loyalty, for example.
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Political risks have so far been considered complex and difficult to grasp. With MBI’s CONIAS Risk Intelligence, political risks are as easy to understand as a weather forecast.