Political risk in 2024 – what should we be aware of?
Political risk in 2024 – what should we be aware of? | Insurance Business America
Risk Management News
Political risk in 2024 – what should we be aware of?
Airmic delivers the verdict on a landmark year for elections worldwide
Risk Management News
By
Kenneth Araullo
In its political risk report for 2024, leading risk organisation Airmic surveyed the landscape to deliver its verdict on what is being pegged as a monumental year for elections globally.
With electoral cycles across so many countries providing potential flashpoints, insurance markets, investors, and analysts are urged to be aware now more than ever. Topics have also shifted, with a rise in strikes, riots, and civil commotion (SRCC) insurance claims leading to increasing demand for specialist standalone political violence (PV) insurance.
Airmic noted that risk professionals look to elections, as they have the possibility of triggering political risk or civil unrest. Knowing they are coming, however, provides a window for organisations to plan and brace for possible impact.
Risk professionals should be in tune with social media, it suggested, in addition to a range of open-source intelligence tools (OSINT) and risk map services to acquire valuable insights into these evolving risks. Horizon scanning and scenario analysis, in particular, were singled out by Airmic.
The organisation also emphasised two approaches for risk professionals: either “top down” or “bottom up.”
Top down means picking big-ticket risks and working through their impacts on people, operations, and finances
Bottom-up, on the other hand, means picking a country or region, as well as adjoining territories and working through scenarios relevant to each
Airmic’s survey also revealed that even before the general election was called in the UK, it was already pegged as the election of most concern for the organisation’s members in 2024.
Risk professionals also pointed to populism and geopolitical impact as the biggest risks in this landmark year. More than half (56%) are using social media to monitor electoral ongoings.
The findings also show that organisations are increasing their due diligence when it comes to political risk, as almost half (44%) of respondents have increased the frequency and scope of horizon scanning and scenario analysis.
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