top risks for 2020

... For the first time in the history of the survey’s 10-year outlook, environmental threats dominate the top five long term risks by likelihood and occupy three of the top five spots by impact. We’ve lived with growing levels of geopolitical risk for nearly a decade, but without a true international crisis. Top 10 business risks and opportunities – 2020 – Spanish (pdf) Download 2 MB T he fluctuations in the risks, as well as new risks highlight the ongoing disruption in the sector. America First doctrine, could well reach breakpoints in 2020. Here are ten of the top geopolitical risks to watch out for in 2020: 2020 elections: Either a Trump reelection or a victory for a Democratic challenger is bound to deepen US political tribalism. Kim’s goal is to be a de facto nuclear state like Israel or Pakistan, to be accepted as a normal nation. Mathew J. Burrows. The Top Geopolitical Risks of 2020 December 12, 2019 Rising geopolitical and geo-economic tensions represent the most urgent global risks, and will only continue to escalate in 2020. We need a new strategy—one that is both ambitious and innovative, geared towards meeting the challenges and opportunities that the new decade brings. REUTERS/Kim Hong-Ji. Probability: 60-40; Demise of US traditional alliances: The global leadership deficit grows in a fragmenting world order. These large countries, using their market size to weaponize trade via tariffs, will play a larger role in setting terms of trade. Such changes are common. With diminishing Chinese and Russian cooperation, ‘maximum pressure’ is of limited utility. Robert A. Manning is a resident senior fellow in the Atlantic Council’s Scowcroft Center for Strategy and Security. Extreme weather events (e.g. (See 3 factors that make silent cyber risk so challenging for CROs). Brexit will finally occur in the wake of the massive Tory victory by British Prime Minister Boris Johnson over Labour and the Liberal Democrats. Each of the issues, and many more identified in our trends report, represent a potential area of risk. Our organization’s … The great unraveling: With the demise of its dispute mechanism, the World Trade Organization—the lynchpin of seventy years of prosperity and a rules-based economic order—may also become defunct. So far, no tech-based startup has roared into the insurance sector and stolen everyone’s lunch. Global business environment slightly less risky in 2020. Sifting through 500 or so submissions from cybersecurity experts eager to take the stage at the conference (I’m on the … Meanwhile preferential trade arrangements, bilateral (e.g. Here are ten of the top geopolitical risks to watch out for in 2020: 2020 elections : Either a Trump reelection or a victory for a Democratic challenger is bound to deepen US political tribalism. 10. A small change in the polling process made it harder for some respondents to give credit for the same thing twice. The next concern in this area is a jump to a completely different type of technology (See 2. And the action of the California Department of Insurance to require insurers to renew fire coverage in the state suggests that as the impact of climate change is felt, regulators will be looking at insurers to help pay for the impact. Cyber replaces business interruption, which has moved down into … 2 Represents a new risk added to the 2020 survey. With his impulses unchecked, Trump’s narrow transactional view of alliances may lead him in 2020 to “bring the boys home,” withdrawing at least 6,000 troops and unwinding the US-Republic of Korea alliance. President Recep Tayyip Erdogan has entered a period of steep political decline. Trump win: 60-40 probability. End of US-ROK alliance, probability 50-50 (strong Department of Defense and Congressional pushback). The time has come to update our Top Risks 2020, taking into account how the coronavirus has accelerated the trends that worry us most. Atlantic Council Strategy Paper Series In any case, universal rules and enforcement will be less important in shaping the terms of trade than the size and power of major economies. Following are the top 10 risks identified in the “Executive Perspectives on Top Risks for 2020” report: 1. In 2020, the top risks that are most important for internal audit to provide the board with assurance over are underlaid by four major themes: Increased organizational complexity Heightened stakes for managing and protecting data Find out the top ten global risks in 2020 for board members and c-suite executives, according to the “Executive Perspectives on Top Risks for 2020… With six new risks moving into the top 10, there were, of course, six that moved out, reflecting that prior concerns either didn’t materialize or that they did and were resolved. Fire and explosion incidents may rank as the sixth top peril for businesses in 2020 according to Allianz Risk Barometer respondents but it is actually the number one cause of financial losses based on the results of insurance claims analysis by AGCS. But most executives are worried that something will happen very soon that negates whatever competitive advantage that they have worked so hard to develop. Decoupling will occur largely in the telecom/5G and electronics/IT sectors, and sensitive national security-related industries, resulting in a fragmented internet and e-commerce. Frederick Kempe. Here are ten of the top geopolitical risks to watch out for in 2020: 2020 elections : Either a Trump reelection or a victory for a Democratic challenger is bound to deepen US political tribalism. | Supply chain attacks are on the rise. Our conclusion in 2016’s Global Risks 2035 was that state-on-state conflict posed a bigger threat than terrorism. Risk outlook: the world in 2020. Follow him on Twitter @Rmanning4. Here are nine responses that we will add for next year: Find out how Willis Towers Watson is supporting insurers with the management and mitigation of risk. But the new employees are more flexible and may just have the right skills and training for the new processes that will be needed for the future. This website or its third-party tools use cookies, which are necessary for its functioning and required to achieve the purposes illustrated in the cookie policy. Mathew J. Burrows is the director of the Atlantic Council’s Foresight, Strategy, and Risks Initiative in the Scowcroft Center for Strategy and Security. One might think that this very favorable trend might lead to optimism about natural catastrophes but instead, concerns remain very high. This may include a Video Johnson wants to rule out any extension of the Brexit process, with the risk that the UK departs the single market without any trade deal. Inflection Points Continued vigilance is critical. Growing global populist and nationalist outbursts are likely Impact of regulatory change and scrutiny on operational resilience, products, and services; Economic conditions impacting growth; Succession challenges; ability to attract and retain top talent; Ability to compete with “born digital” and other competitors; Resistance to … Leaders without strategies bungle the recovery. Concerns over operational capabilities have strategic underpinnings. We have you covered! Opening the gates to cheap US agricultural goods could undermine Tory base support and stir public anger. The US Federal Reserve worries its fiscal and monetary instruments may not be up to the job for dealing with even just a recession. Rigged! The United States also suffers from growing debt problem at the Federal government level, plus substantial corporate debt at a time of record low interest rates. Cybersecurity and cybercrime (up from two in 2019) Insurers have more to worry about regarding cybercrime than other businesses. Back in January, we flagged that as bad as the tech war between the U.S. and … These are where cyberattackers inject code into a website — … New Atlanticist At the same time, reactions to Iranian overreach, with anti-Iran protests in Iraq, Lebanon, and internally against the Khamenei regime, help to push Tehran toward a new deal, limiting their regional influence, and dampening populist-driven change in the Middle East. Next phase: How to live with a nuclear North Korea. Dave Ingram Cyber incidents have been ranked as the top business risk in the USA for 2020. We know how companies can unlock potential through effective risk management. 2020 is a tipping point. This … Want to be the first to get up to speed on the meaning of big, breaking international developments? A little more than a year ago, interest rates looked like they were going to continue to gradually head upwards to levels that would make it easier financially for insurers to run businesses where they hold other people’s money, sometimes for long periods of time. A deeper dive into the report, under operational risks, highlights a growing emphasis on “talent and culture,” which made up four of the top 10 risks. Spurred by Trump’s non-response to Iranian belligerence and US incoherence in Syria, as well as a need to end the war in Yemen and stabilize Syria, regional actors become more pro-active, with Russian President Vladimir Putin as a power broker and a more active EU diplomacy. Over the long run, Brexit may lead to the breakup of the United Kingdom, as the Scottish Nationalist Party swept the Tories into dust and more Irish nationalist MPs were elected in Northern Ireland than the Democratic Unionist Party (DUP). January 15, 2020. Interesting shifts in the 2020 top 10 risks. Kim prefers a “muddle through” North Korean model, accelerating cybercrime to accumulate bitcoins and other illicit activities, boosting ties to Russia and China who are eroding sanctions, and incrementally building economic cooperation with South Korea. After several years of stable responses, our latest poll shows significant shifts in the risks that are most concerning. The coronavirus outbreak will weaken Iran, Iraq, and Syria. For the first time this year, Willis Re was joined by Willis Towers Watson’s Thinking Ahead Institute in conducting the survey. 2019 and the early days of 2020 revealed a world … Present at the re-creation: A global strategy for revitalizing, adapting, and defending a rules-based international system, Policy on donor acceptance and disclosure. by Follow him on Twitter @matburrows. Major biodiversity loss and ecosystem collapse. The report is based on a survey of operational risk practitioners across the globe and in-depth interview with respondents. It is also not a given that a Democratic victory fully reverses the tendency of the United States to retreat from engagement across the world. Insurers need to decide which of these innovations to adopt and which to pass up — a decision fraught with danger. Most executives concerned about economic conditions. The economy was also the top risk condition for board members, CEOs, CFOs and CIOs, and made it to the top five list for all regions of the world we analyzed for 2020 except for North America. Probability: 55-45. Twenty-five years of Denuclearization Diplomacy has run its course, exhausting all genuine possible nuclear-free end states. Active moves toward Asian & Middle East proliferation: 40-60; Post-US Middle East: Trends already percolating with Saudi-Gulf Cooperation Council backchannel diplomacy with Iran evolve toward a new regional balance of power and recalibrated Saudi-Iran rivalry. Survey respondents were asked to rate 30 different risks involving macroeconomic, strategic, and operational issues. The latter group—often excluding the United States—could become the new normal for global trade. The retirees leaving do make it harder to keep doing things just the way that they have been forever. In 2020, US political institutions will be tested as never before, and … For several years, industry observers have expected tech giants to make incursions into the insurance market. 2020 will likely bear more resemblance Of those, the top 10 risks identified are as follows: While we ask about “DANGER” what we often get is more related to “FEAR.”. As states are legalizing marijuana, there is a ripple effect of new claims in many insurance lines. As luck would have it, this is the only risk in the survey that had the exact same ranking as last year. Insurance industry growth in total tracks well with nominal GDP growth over time, but there are winners and losers. 2020 could also see US allies and partners The RSA Conference is the world’s biggest and most respected gathering of CISOs, technologists and cybersecurity specialists. Nuclear proliferation. China’s internal contradictions are growing, including massive public, household, and corporate debt (300 percent of gross domestic product), aging demographics (labor shortages, pension, and healthcare demands), and sagging growth (two to three percent in real terms). Why a collaborative tone is a first step. High-performing institutions cultivate and grow talent, carefully balancing costs and rewards. Digital effectiveness remains in the top three risks and opportunities … ... dominating four of the top five risks overall. Trump calls it a great deal. The main elements of Beijing’s predatory mercantilism (substantive subsidies to state-owned enterprises and “national champions,” “digital sovereignty” in pursuit of ‘Made in China 2025,’ and economic coercion of foreign investors) remains largely undiluted. Beginning in 2018 and mushrooming in 2019, we have seen more insurtech offerings for insurance. All rights reserved. Source: 2019 Risk in Review Study. by The nuclear “doomsday” clock stands at two minutes to midnight. Digital remains in the top three. Video 101 (re)insurance executives participated in the survey. 3 Theft and fraud. Likely this is a result of a suspicion that the “new normal” is for erratic and more severe weather incidents due to climate effects. Following are the top 10 risks identified in the “Executive Perspectives on Top Risks for 2020” report: And after thoughts of impending doom for several years, naysayers have recognized that there may well be greater resilience built into major cloud-based services than their prior systems. In the two years since, the post-Cold War order has continued to unravel without a “new normal” emerging. Download the ORX Operational Risk Horizon 2020 report to find out the top emerging and current operational risks for 2020 and beyond for banks and insurers. Similarly, after more sturm and drang (with a possible US-Iran clash by miscalculation), the EU and Putin facilitate a new Iran nuclear deal 2.0 (a la NAFTA 2.0) with longer sunset provisions and missile constraints. Thus, the United States is ending the architecture of restraint, and starting a Hobbesian world of all-against-all, un-learning the lessons from the Cold War of avoiding an arms race. The law of unintended consequences may bring greater problems to insurers under this mixed environment. This means people in the industry believe that “we don’t know what, but something else is likely to hit us hard.” It is an indication that there is a feeling of ill-defined doom. against company and country. While, at the federal level, there are major changes being made to regulations that are typically thought to be in favor of businesses, insurers generally operate under state laws and regulations, which for the most part have not changed as much. Equally, slowing growth and the EU’s divisions in the wake of its uneven recovery from the 2008 financial meltdown make it an unlikely candidate to pull the world out of a recession. Still a high concern, but slowly drifting lower. TABLE OF CONTENTS Methodology Analysis Across Different Sizes of Organizations Analysis Across Geographic Regions Overall Level of Risk Concerns for 2020 Overview of Top 10 Risks Biggest and Smallest Changes in Individual Risks from Prior Year Analysis Across Industry Groups Executive Summary Risk Radar – Top 20 risks before 2020 3 14 17 8 11 19 5 7 4 9 12 10 15 18 6 13 20 1 2 16 Emerging Established key risk To be considered on a recurring basis Non-standard or exceptional Emerging and exceptional risks, categorized as a current, high priority by stakeholders This would be more dangerous than 2008, as central bank cooperation and US Congressional action are more problematic. As participants in a highly regulated industry, insurers are always highly concerned with this risk. Water crises. Similarly, new risks climb in the rankings because of increasing awareness often associated with problems or losses or fear that they will soon produce problems or losses. With job losses felt the ... is projected to decline by an additional 30-40% in 2020. The top 10 most dangerous risks for 2020 chosen by the 101 insurance executives who answered our poll are: Insurers have more to worry about regarding cybercrime than other businesses. Whatever competitive advantage that they have worked so hard to develop Supply chains will top risks for 2020 Washington ’ s –. How to live with a nuclear North Korea inject code into a website — … Represents... Industry, insurers are finding that there are always highly concerned with this risk increased in 2018 and in. Or new renaissance deal could end up formalizing the Irish Sea as the most dangerous that... Twenty-Five years of stable responses, our latest poll shows significant shifts the. Chain attacks are on the top risks for 2020 of big, breaking international developments very long-term while... Gdp growth over time, we have seen more insurtech offerings for.. 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