The fundamental interconnectedness of things

On Saturday, global leaders flew home from the World Economic Forum at Davos where they were debating the big issues of 2015. The increasing interconnectedness of global risks was high on their agenda

The graphic below shows the results of a survey into the correlations between different types of risk in a time of increasing globalisation. The results seem to support the argument that the risk of natural catastrophes is only weakly linked to other systemic risks. Clicking on the chart will take you to an interactive version.

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The second chart shows that natural catastrophes are not that high on the list of things that leaders are concerned about. As reinsurers and ILS funds look for ways to source new risk, they might consider developing products that protect people and businesses from some of the scenarios that they are more worried about.

risks

See also:

Dr Andrew Coburn at Cambridge University recently spoke to InsuranceLinked about how globalisation was increasing the risk of large, global catastrophes.

Posted: Monday, January 26th, 2015