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Widening polarisation expected in elections in US, EU where there is potential for large insurance losses
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Terrorism, civil unrest, environmental activism risks intensifying in volatile geopolitical environment
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Multinational businesses show increasing interest in political violence insurance coverage to mitigate their risks
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Economic and insured losses from just 7 civil unrest incidents in recent years cost approximately US$13 billion
Ben Eguzozie
2024 has been tagged a year of unprecedented ‘super-cycle of elections’ by the Allianz Commercial Group. Why? Almost half the world’s populations will go to the polls before the year is out.
According to a new report from Allianz Commercial, security is a concern in many territories, not only from the threat of localised unrest but because of the wider-reaching consequences of electoral outcomes on foreign policy, trade relations, and supply chains.
The headline election will be in the US in November, when a narrow result could inflame existing tensions. The European Parliament elections in June could also deepen divisions, if radical-right parties gain votes and seats.
As unrest can now spread more quickly and widely, due in part to social media, financial costs from such events for companies and insurers are mounting. Economic and insured losses from just seven civil unrest incidents in recent years cost approximately $13 billion.
With the threat of terrorism also on the rise, and the prospect of greater disruption from environmental activists occurring, global businesses will face even more challenges in the next few years and will need to anticipate as well as mitigate evolving risks with robust business continuity planning.
According to Srdjan Todorovic, head of political violence and hostile environment solutions at Allianz Commercial, “so many elections in one year raise concerns about the fueling of polarisation, with tensions potentially playing out in heightened civil unrest”.
He said polarisation and unrest within societies are fueled by fear. “They undermine trust in institutions and challenge people’s sense of a common purpose built on shared values”.
Todorovic further said there are expectations of increased unrest around environmental issues in future, not only from activists, but from those who are pushing back against government climate mitigation policies.
All eyes on elections in the US and the EU
The Allianz report says the US presidential election in November is likely to be a close call, with the outcome depending on results in a handful of states.
A recent poll shows that more than one-third of Americans believe President Biden’s election win in 2020 was not legitimate. Widespread disaffection among voters could be exploited by misinformation created by Artificial Intelligence and spread via social media.
Deepfakes, disinformation and repurposed imagery, as well as customised messaging, could galvanise unrest or influence small but potentially decisive parts of electorates.
Also, many commentators have predicted that European Union (EU) elections in June this year could see a number of states politically shift to the right, with the potential for populist or far-right parties to gain votes and seats, building on a trend seen in 2023. Any success for these parties across Europe could result in growing opposition to EU environmental, immigration and human rights policies, the Allianz report said.
Todorovic adds that the impacts of a political shift to the right and subsequent policy changes endure long after a political party’s term in office.
“They fundamentally change societies and public attitudes; and make the next electoral shift to the centre or left seem drastic, creating the potential for schisms and potentially violent responses from those who feel underrepresented by a regime change,” he said.
