2019 was a notable year for civil unrest, says Aon’s Risk Maps 2020, but COVID-19 could make things worse in 2020
Three in five countries are exposed to some form of riots or civil unrest in 2020 according to Aon’s latest Risk Maps 2020, with the proportion of advanced economies among that list growing. One reason is the impact COVID-19 is having on underlying vulnerabilities in those economies. “Across the globe and across the political spectrum, people are frustrated at the inability of their political leaders to resolve the largest challenges of our time,” says Aon’s report, which recommends businesses with operations in potentially exposed areas to “consider how to secure their people and premises in the immediate-term and in the event of extended disturbances.”
The financial cost of civil unrest
In 2019, Hong Kong, Paris and Santiago all saw significant disruption from strikes and riots. The hospitality, retail and tourism sectors were heavily impacted but denial of access generating business interruption and some property damage effected the wider economy. As a consequence, Hong Kong’s economy contracted by 3.2% in the third quarter of the year.
In Chile, Aon’s report estimates that the cost of the protests against rising living costs, wage stagnation and household debt will exceed several billion dollars. The unrest also illustrates that civil disorder shouldn’t simply be identified with high levels of poverty and youth unemployment. The middle classes in Chile, France and Hong Kong have all been closely identified with the problems in those countries.
Trouble continues in 2020
2020 has seen no let-up in civil unrest either, with the US experiencing widespread demonstrations related to the death of George Floyd. In some instances confrontations between opposing groups or with the Police responses have turned violent, leading to regions imposing curfews to try and restrict the spread. In the UK, recent counter demonstrations led by extreme far right groups in response to the Black Lives Matter movement have also turned ugly.
Society reacts to COVID-19
A big concern however, is what the impact of COVID-19 will be given there has already been related unrest in Belgrade in early July, as Serbs protested against the re-imposition of lockdown measures. The harsher economic conditions and global downturn caused by the pandemic will also lead to more incidents of unrest given “civil commotion risk is closely tied to imminent economic grievances,” says Aon’s Risk Maps 2020.
Another trend with the potential to cause civil unrest that has taken a back seat during the global health emergency but is unlikely to disappear is environmentalism. The Extinction Rebellion movement led to ten days of protests in London in April 2019, causing high levels of disruption for businesses in the area with demonstrators using tactics such as blocking the entrance to the London Stock Exchange and obstructing the Docklands Light Railway. This issue is unlikely to go away says Aon’s report: “Although economic grievances tend to take precedence over environmental concerns, the public increasingly sees the two issues as closely tied together.”
Make sure continuity management plans are in place
What can businesses do to mitigate the risk? Those businesses based in areas which have the potential for civil disturbances which could be historic public spaces for example or centres of government, will have to look at how they can keep their staff and premises safe in the event of an outbreak of violence.
Aon’s report suggests measures like ensuring business continuity management plans are in place and the ability to make use of alternate locations and remote working are important, while insurance can also play a key role. “For their insurance coverage, firms with likely exposures should consider which insurance vehicle to utilise – or potentially step into a property-terrorism programme, extending cover for both strikes, riots, civil commotion or the still broader political violence.”
To find out more, download Risk Maps 2020 – Aon’s guide to political risk, terrorism, and political violence.