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Rising Election Cycle Fuels Political Violence, Insurance Concerns

A recent report from Live Insurance Info revealed that, according to Allianz Commercial, almost half of the world’s population will run in elections before the end of 2024, indicating the risk of political violence and huge insurance losses. Our report reveals that elections around the world this year will create the potential for a “super-cycle” of conflict and unrest, a threat exacerbated by rising extremism and misinformation.

Impact of Terrorism and Political Violence on the Insurance Sector

According to the report, recent large-scale terrorist attacks, political violence, and terrorism have caused massive losses to the insurance sector. However, the insurance industry has also suffered vast losses due to strikes, riots, and civil commotion (SRCC) in some areas. Thanks to the growing power of social media, the report notes that “the unrest could have spread more quickly and widely, but the financial costs of social media are continuing to grow.”

Economic and Insured Losses from Civil Unrest

The report states that such activities could lead to significant economic and insured losses, resulting in huge losses for companies and insurers. To put it in perspective, the cost of economic and insured losses from just 7 civil unrest incidents in the last few years has reached $13 billion.

Rising Concerns in the Insurance Industry

The sensational report points to the Allianz Risk Barometer published in January 2024, which reveals that insurance businesses are more concerned about political risks and violence than in years past. Political risk and violence have risen to No. 8 on the list of concerns for business worldwide, their highest ranking since 2017. When the business world was uncertain about the impact of the UK’s Brexit vote and the election of Donald Trump in the United States.

Drivers of Global Unrest in 2023

Anti-government protests broke out in 83 countries during 2023, driven by factors such as high inflation, wealth inequality, food and fuel prices, climate concerns, and concerns about perceived attacks on civil liberties or democracy, according to the report. 

Super Cycle of Elections and Political Risk

Impact of US Elections

In cases of super-cycle election risk, Allianz Commercial pointed to the US “headline election” in November. Any subtle election outcome at that time could escalate existing tensions even more than before, especially on the battlefield.

Other Major Elections in 2024

Todorovic said the November election is likely to focus on battleground states as well as the capital, Washington DC. Other elections this year include EU elections in June, elections in India in April/May, elections in South Africa in May, and elections in Mexico in June.

Rise of Far-Right Politics in Europe

If we notice this closely, “Radical right-wing parties may gain votes and seats” in the European Parliament elections in June. Referring to this in this report, it has been said that this change is similar to the electoral trends seen in Europe in the year 2023, and this has also increased the risk of intensifying cultural and ideological divisions.

Consequences of Populism and Polarization

The Todorovic further said that the rise of far-right and populist politics in Europe is both a matter of concern and a reason because it promotes polarization and unrest in society. They undermine public confidence in existing institutions and challenge a sense of common purpose built on shared values.

Monitoring Environmental Issues and Activism

He further explained that – So many elections in a year increase populism and polarization among the public. Which increases unrest and tension among citizens. Additionally, we expect to monitor increased activity on environmental issues not only from activists but also from those who are pushing against government climate mitigation policies.

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