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The COVID-19 Pandemic: Opportunities and Implications for Captive Insurance

The COVID-19 Pandemic: Opportunities and Implications for Captive Insurance

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The COVID-19 Pandemic: Opportunities and Implications for Captive Insurance explores the challenges presented by today's business and economic upheaval, as well as the hardening insurance market, and what it means for the captive insurance industry.

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World Economic Forum Has Released "The Global Risks Report 2017"

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January 26, 2017

Economic inequality, societal polarization, and intensifying environmental dangers are some of the top trends identified as most likely to shape global developments over the next 10 years, the World Economic Forum’s The Global Risks Report 2017 found. Collaborative action by world leaders will be urgently needed to avert further hardship and volatility in the coming decade.

In the report, experts assessed 30 global risks, as well as 13 underlying trends that could potentially amplify or alter them. Three specific risk categories stood out as the most pressing threats to overall global stability.

  • Rising income and wealth disparity ranked first among trends that will determine global developments in the next 10 years.

  • Climate change was the number two underlying trend this year, with extreme weather events emerging as the single most prominent global risk.

  • Technological change is outpacing society at large. Interestingly, artificial intelligence and robotics emerged as having the greatest potential benefits, but also the greatest potential negative effects.

“We live in disruptive times where technological progress also creates challenges. Without proper governance and re-skilling of workers, technology will eliminate jobs faster than it creates them. Governments can no longer provide historical levels of social protection and an anti-establishment narrative has gained traction, with new political leaders blaming globalization for society’s challenges, creating a vicious cycle in which lower economic growth will only amplify inequality. Cooperation is essential to avoid the further deterioration of government finances and the exacerbation of social unrest,” said Cecilia Reyes, group chief risk officer of Zurich Insurance Group.

According to John Drzik, president of Global Risk and Specialties at Marsh, “Artificial intelligence (AI) has the potential to deliver dramatic benefits in sectors from manufacturing and transportation through to financial services and health care. However, increased reliance on AI will create new threats and amplify existing ones, such as cyber and social instability, making the parallel development of risk governance just as crucial.”

“Urgent action is needed among leaders to identify ways to overcome political or ideological differences and work together to solve critical challenges. The momentum of 2016 towards addressing climate change shows this is possible, and offers hope that collective action at the international level aimed at resetting other risks could also be achieved,” said Margareta Drzeniek-Hanouz, head of Global Competitiveness and Risks at World Economic Forum.

The complex transitions that the world is currently going through, from preparing for a low-carbon future and unprecedented technological change to adjusting to new global economic and geopolitical realities, place even greater emphasis on leaders to practice long-term thinking, investment, and international cooperation.

Now in its 12th year, The Global Risks Report utilizes data from its annual Global Risks Perception Survey, completed by nearly 750 individuals from the World Economic Forum’s global multi-stakeholder community. The report also draws on the output of global risk workshops hosted by the World Economic Forum.

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