At last month’s World Economic Forum in Davos, many of the world’s most influential people (and Bono) spent the week discussing humanity’s most significant challenges. Delegates found that this year's biggest challenges were very different to last year. One thing that was constant was that many of the risks that are of most concern to global leaders are not being addressed by the insurance market. This disconnect should be an opportunity for growth.
For the eleventh year in a row, the World Economic Forum asked its members what they were most worried about in terms of both impact and likelihood. The report revealed some big changes in the risk landscape over the last 12 months. "Failure of climate-change mitigation and adaption" moved from the fifth to the first most impactful risk. The most likely risk was "Large-scale involuntary migration" which ranked just 16th in last year's survey. This chart shows the ten risks that have changed the most over the last 12 months.
This chart shows the dramatic effect that global warming could have on crop yields.
Projected Impacts on Crop Yields in a 3°C Warmer World
This year's respondents again supported the premise that underpins much of the allocation to insurance linked funds. Natural catastrophes are weakly correlated to the major global risks.
Here is the 2016 top ten ranking for both likelihood and impact.
Posted: Monday, February 1st, 2016