Aon publishes 2018 Risk Maps for Political Risk, Terrorism
and Political Violence
- Political Violence: The likelihood of interstate
conflict, even involving major powers, is at the highest point
since the end of the Cold War. Growing geopolitical competition and
weak leadership in international diplomacy have contributed to
increased risks of armed conflict over the last year.
- Terrorism: The number of terrorist attacks in Western
countries in 2017 (204) doubled – up from 96 in 2016, though
casualties remained at similar levels. A number of war zones
internationally continue to serve as incubators for international
terrorism, although the global threat from Islamic State seems to
be waning somewhat.
- Political Risk: Last year saw political risk increase
in 11 countries, with climate change and commodity shocks weakening
fiscal positions, which are still struggling to recover from the
commodity shock, and exacerbating rising levels of political
violence and supply chain disruption.
LONDON, April 11, 2018 /PRNewswire/ -- Aon's
(NYSE:AON) 2018 Risk Maps covering Political Risk and Terrorism and
Political Violence, produced in conjunction with Continuum
Economics and The Risk Advisory Group are published today.
Terrorism and Political Violence
Political violence risks are rising globally, due to
geopolitical tensions, a weakening of liberal democratic
governance, and the repercussive effects of chronic conflicts
around the globe.
For the third successive year, more country risk ratings have
increased (17) than decreased (6). This year:
- 40% of countries are listed as being exposed to terrorism and
sabotage risk;
- 60% to civil unrest risk, and;
- 33% to insurrection, war or coup risk.
Forty-six countries or territories are now rated as high or
severe risk, representing 22% of the global total.
The likelihood of interstate conflict, even involving
major powers, is at the highest point since the end of the Cold
War. Growing geopolitical competition and weak leadership in
international diplomacy have contributed to sustained or increased
risks of armed conflict over the last year. Growing rates of
polarisation over political, economic and social issues in mature
democracies, and divisions between Western powers in the face of
complex threats and risks, has also contributed to worsening global
security and greater strategic uncertainty.
The number of terrorist attacks in Western countries in
2017 (204) was roughly double that of 2016 (96) but the total
number of casualties in both years was broadly the same (1,092 in
2017), meaning that the lethality of attacks has fallen.
Notably, the threat posed by Islamic State has stopped
spreading – but has not yet receded. IS mounted terrorist
attacks in 29 countries on five continents in 2017, the same number
of countries as in 2016 and up from 19 countries in 2015, but the
global reach of IS appears to have peaked, and it seems likely that
the number of countries where it is able to mount attacks, or
inspire others to do so, will fall in 2018.
In particular, the tourism sector is having to manage the
risks posed by increased terrorism, with the sector a highly
attractive target for some terrorist organisations. In 2017, there
were at least 35 attacks worldwide that directly targeted
commercial sectors that are critical components of the tourism
industry, such as hotels and resorts, nightclubs, civil aviation
and visitor attractions.
Political Risk
Last year political risk increased in eleven countries,
compared to only two countries that saw reduced risk, showing the
persistence of political risk across the globe, highlighted by
increases in political violence and supply chain disruption. Many
countries' risks of supply chain disruption have risen due to both
climate shocks and weakening fiscal positions.
Notably, over the last year, Asian countries' trade linkages
have been shifting away from the US and toward China. This is due to China's economic development, and its rise as
a trade giant. Amid China's rise,
Asia's exports to the US have
edged down from around 23% of total exports in 2000 to stabilize at
around 12% in recent years. By the same token, Asia's exports to China have more than doubled over the past
decade to around 23% currently.
Elsewhere, political risks in Latin
America are increasing ahead of a busy election season,
delaying major reforms in Brazil
and stoking fears of reform reversal in Mexico. Major countries are at risk of
electing populist governments, and smaller countries are
experiencing their share of political noise.
More broadly, the region experiencing most downgrades is
Africa. Ongoing conflicts
within countries, the erosion of democratic governance and
increasingly frequent corruption scandals have led to more
political violence. Groups such as IS and Boko Haram are taking
advantage of fragile institutions and weak borders. Elsewhere, the
Middle East contains some of the
highest-risk countries in the world: Iraq, Syria,
Yemen and Egypt. Instability and violence in the region
have spilled over to neighbouring countries, undermining trade and
tourism.
Mark Parker, Head of Property,
Casualty and Crisis Management, Aon Global Broking Centre,
said: "The global geopolitical environment remains volatile.
This is reflected in the 2018 Risk Maps, with the interlinked
threats posed by Political Violence and Political Risks growing.
Given this heightened level of risk, and the rapidly evolving
landscape against which businesses are operating, it is essential
the companies understand their exposures and the potential for
political instability to impact their people, property and supply
chains. Ensuring that the right solutions are in place to mitigate
and transfer risk is essential for firms operating
internationally."
Paulina Argudin, Director,
Country Risk Model, Continuum Economics, said: "The Aon
Political Risk Map 2018 captures changing elements of political
risks for businesses across emerging and frontier markets
countries. Last year we saw political risk rising in several
countries, driven mainly by increases in political violence and
supply chain disruption. The persistence and rise of political risk
across the globe demonstrates how relevant it is for businesses to
identify and monitor specific political risk elements in their
countries of operation.
Henry Wilkinson, Head of
Intelligence & Analysis at The Risk Advisory Group, said:
"The Aon Terrorism & Political Violence Map 2018 points to
inter-state tensions driving up longer-term political violence
risks, as well as diversifying terrorist and extremist threats
particularly in the West. The long-term trend of non-state actors
being the predominant political violence concern in most regions is
shifting towards geopolitical risks. These are more business
threatening and demand board-level ownership. In such an unsettled
environment, it is imperative that businesses invest in world class
crisis and risk management programs that are intelligence-led,
anticipatory and adaptive to rapid change."
Notes to editors
The Aon Political Risk Map captures
changing risks for businesses and countries across emerging and
frontier markets (non OECD countries).
For more information and to access the interactive maps and full
report please visit the Aon website.
Media Contacts
Madeleine
Little +44 (0)20 7086
0347 madeleine.little@aon.co.uk
Tom Blackwell, FTI Consulting +44
(0)20 3727 1051
tom.blackwell@fticonsulting.com
Cybil Rose +1 847 638 6691 /
cybil.rose@kemperlesnik.com
Maneesh Sah +65 6221 8222 /
maneesh.sah@aon.com
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About Continuum Economics
Continuum Economics
(formerly Roubini Global Economics) is the international
market-leading service for independent economic research powered by
4Cast and Roubini Global Economics. With its growing user base of
10,000 clients and a reputation for incisive analysis on every
aspect of the market, it provides research that spans short-term
market signals and long-term strategic themes. This approach
uncovers opportunities and risks before they come to the attention
of markets, helping our clients make more informed decisions.
Continuum Economics works with clients in a series of different
ways, from macro strategy subscription products to bespoke work,
multi-client conference calls, direct access to analysts and the
licensing of its systematic country risk analysis tool. For further
information on Continuum Economics, please visit
www.continuumeconomics.com
About The Risk Advisory Group
The Aon Terrorism and
Political Violence map represents detailed empirical and
intelligence based assessments on terrorism threats and political
violence risks.
The map has been produced in conjunction with The Risk Advisory
Group since 2007. The Risk Advisory Group is a leading, independent
global risk management consultancy that helps businesses grow
whilst protecting their people, their assets and their brands. By
providing facts, intelligence and analysis, The Risk Advisory Group
helps its clients negotiate complex and uncertain environments to
choose the right opportunities, in the right markets, with the
right partners. www.riskadvisory.com
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