Pandemics became the top concern for insurance professionals this year as the COVID-19 crisis roils the industry worldwide.
Infectious diseases and pandemics were ranked as the most significant risks to society over the next five to 10 years in a study published Thursday by French insurer AXA SA that today published the seventh edition of its Future Risks Report.
That’s a reversal from last year, when climate change was seen as the biggest concern.
COVID-19 is proving to be a major challenge for insurers, especially those that provide cover for canceled events such as sports matches and concerts. Disputes over coverage have led some policyholders to take legal action, with AXA recently losing a lawsuit against five restaurant operators. The insurer said it will appeal the ruling.
The survey of 2,600 insurance professionals in 53 countries, found that 56% of the respondents consider pandemics one of the top five emerging risks, up from 23% in 2019.
Over 20,000 people were interviewed. Conducted in partnership with research institute IPSOS and geopolitical analysis consultancy Eurasia Group, this year’s ranking of the 10 main emerging risks is marked by the Covid-19 crisis.
Previously underestimated risks related to pandemics and infectious diseases rise from eighth in 2019 to top the 2020 ranking. Climate change-related risk comes in second, dropping from the top spot it has held for years. Climate change remains the number one risk in Europe but falls to third place in Asia and America. The drop is particularly marked in North America, where the share of experts who consider this risk major has fallen from 71% in 2019 to 46% in 2020.
Cybersecurity risk, ranked third, increases in prominence this year with the new and widespread adoption of technology and the explosion of cyberattacks during lockdown. In particular, the perception of cyber warfare risk has increased; it is seen as the main security threat by 47% of experts compared to 37% last year. The risk of shutdown of essential services and critical infrastructure following a cyberattack has also increased (+7 points to 51%).
Geopolitical risks occupy fourth place, with a significant increase in the risk of digital warfare between nations, which experts consider to be the top new security threat.
Finally, the risk of social unrest placed fifth.
The reduced emphasis on climate change “is concerning, especially among our American and Asian respondents, as we believe that shorter-term issues around the pandemic should not completely overshadow longer-term threats,” AXA Chief Executive Officer Thomas Buberl said in a statement.
The European insurance industry has been working on ideas to develop state-backed solutions to protect businesses against future pandemics. The French government, which has sought public comment on a series of proposals this summer, hopes to complete work on a coverage plan by the end of the year.
“This seventh edition is of course marked by the exceptional context of the Covid-19 pandemic. It highlights health as a major issue, which we consider a positive shift, as we have considered it underestimated for years. However, this must not affect the fight against climate change, which remains the most significant and pressing challenge of our time. In line with last year, this year's edition highlights the growing interconnection of risks, calling for collective and concerted solutions to strengthen the resilience of our economies and societies,'' said .Buberl.
The 2020 edition of the Future Risks Report can be accessed at: :