The coronavirus pandemic has introduced a new suite of risks into the lives of individuals and their communities, as well as the operations of businesses. During a recent webinar hosted by AXA XL, titled “COVID-19’s impact on the global security and threat landscape: Preparation, response, and evacuation,” experts addressed the myriad of COVID-19 related security threats, as well as preventative steps that organizations can take as countries enter into the next stage of the global crisis.
Since the start of 2020 and as a direct result of the pandemic, there have been several notable developments seen in security and political environments across the globe, according to a leader from consultancy firm S-RM, whose services underpin many insurance offerings by AXA XL.
“Over the past six months, our conversations with clients have often involved the implications of the COVID-19 pandemic, what those might mean for the security of clients’ operations, for their businesses, and for their plans in the future,” explained Cvete Koneska, director and head of political and security risk analysis at S-RM, adding, “COVID-19 is primarily a global health crisis, but that’s not all it is. Beyond the immediate health emergency, we are looking at broader implications, [since] it is also an economic crisis and potentially a precursor catalyst to political instability across the world.”
One of the biggest punching bags for the pandemic has been the global economy, with experts predicting a recession deeper than any other in recent history coming from the nationally implemented lockdowns in many regions. Koneska highlighted the goosebump-inducing forecast of a 5% contraction in global GDP this year, with some specific economies being particularly hard-hit. However, beyond the numbers, what really matters is “the broader impact that the economic difficulties are likely to have on our society,” she continued, “and, as you can expect, in times of economic downturn, we see growing inequality.”
Those markets that already had significant spreads in wealth distribution will be particularly vulnerable to further inequalities, which in turn could result in higher unemployment, higher poverty levels, and growing discontent.
Meanwhile, on the global political and security level, COVID-19 has put additional stress on international relationships, especially those that were already strained before the pandemic hit, such as the US-China relationship. The US election this year will be important in determining how global security and politics evolve over the coming years, though struggles likewise remain in the European Union, as many member states were impacted severely by the pandemic and the EU has generally struggled to create a united front when it comes to the crisis.
Finally, a discussion on the impacts of the coronavirus would be incomplete without including the travel sector.
“Air travel has declined very, very sharply over the past few months,” said Koneska. “In some cases, it has declined more than 90%, which is a giant blow for the aviation industry of course, but it also has already had implications for the broader economy, and the businesses and sectors that rely on aviation.”
The risks that have arisen from the pandemic in turn have implications for commercial insureds around the world. As economies gradually open up, it’s crucial to note how the pandemic has impacted various operating environments in terms of travel-related security threats, like crime, violence, and kidnapping, explained Markus Korhonen, associate of political and security risk analysis at S-RM.
“The pandemic continues to have a huge impact on people, on politics, on business,” he said. “The varying degrees of lockdown measures to contain the pandemic that have been enforced by police, and in some instances the military, have brought down crime rates, even in some of the more violent countries around the world. But, on the other hand, security personnel in a lot of countries have also been accused of using excessive force against lockdown violators, and, in some instances, committing crimes themselves.”
With spikes in coronavirus cases and related threats likely to continue into the near-term, businesses need to consider how to plan for the potential evacuations of their personnel, especially as other threats continue unabated in less stable parts of the world. As businesses think and rethink how to operate in this new normal, the key takeaway is to prepare for the worst and hope for the best.
“The important thing is to identify the risks that are most likely to affect you and your business, and your travellers and your staff,” said Peter Doherty, director and head of crisis response at S-RM. “On the whole, the good news is they tend to be mid to high likelihood, but with a relatively low impact, so that’s things like an airline strike or a traffic accident … But that doesn’t mean that the lower likelihood and higher impact risks can be ignored, because we really do need a dynamic and flexible approach to be able to identify [risks], [make] plans, and evacuate where necessary, particularly if we’re operating in difficult environments.”
