Climate change, cybersecurity, geopolitical stability and other key risks have remained at the top of insurance survey rankings over the past four to five years, according to Axa future risk report 2024.
Climate change, for example, has been the number one risk organisations say they face since 2021. And even though recently there has been a lot of focus on geopolitical uncertainty, it has been in the top four risks since at least 2018.
Polycrisis
Over the past few years, the way that multiple high-level risks impact one another has been referred to as a polycrisis.
For example, “climate change continues to trigger a surge in various risks,” said Frédéric de Courtois, Axa Group’s deputy chief executive officer. “We are not only talking about natural catastrophes but also profound impacts on human health, with diseases spreading into new areas and extreme weather compromising the human body’s ability to recover.”
That complexity has meant that risk managers and insurance professionals must cultivate new competencies so that they can take a more comprehensive approach to their work, he said.
Emerging risks
Just because the risk categories have remained relatively stable, the nature of those risks are changing. For example, AI powered disinformation has become a major threat to democratic elections over the past year or so.
The Axa survey found that many people were over-confident in their ability to spot misinformation. While almost 80 per cent of experts and members of the public said they could discriminate between true and false information – they rated other people’s ability to do so much lower.
Despite these changes in detail, the founding principles of risk management remain the same, the report said. “From the initial identification of risks to evaluating the way they may impact our operations, the determination of how acceptable they are and how relevant monitoring and mitigation actions may be implemented.”
But to deal with growing complexity in risk management, professionals need to continue to both keep abreast with the changing risk landscape and refresh their approach. “We must also make sure we are equipped with the capacity to get a sense of emerging trends, find relevant indicators, and come up with a plan to address risks, not in a silo, but in relation to one another,” it said.
