The World Economic Forum’s Global Risks report

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As mentioned in my last post that eventually took a different direction, I was looking for the article in which I had read about an increasing worry among experts from different realms over possible consequences of income inequality or disparity. And I found it: it was a (German) newspaper article reporting the findings of the annual survey on global risk assessment conducted by  the WEF and summarized in their ‘Global Risks‘ report.

Every year around 1 000 experts (700 in 2014) from industry, international organizations, government, academia and society are asked to give their assessment of a list of global risks. In 2013, the survey encompassed 50 risks, in 2014 31. The results are reported on the WEF webpage, where you can also find the survey itself and graphic analyses of the results.

First launched in 2005 by the World Economic Forum, the Global Risks report is widely recognized as one of the world’s leading publications on global risks. The report identifies risks of global relevance and offers leaders from business, government and civil society a tool to understand them as well as a way of identifying interconnections between them. www.weforum.org/issues/global-risks

According to the article I had read, possible ramifications of income disparity had topped the list for the third time in 2014 and was not limited to developing countries, but also included Europe. Especially unemployment among the younger generation (in Europe) and the increase of low-income jobs was seen to hold a potential for future social unrest (according to the German newspaper article; I have yet to find the corresponding passage in the original report. In its Executive Summary ‘Severe income disparity’ is only listed as most likely economic risk to manifest itself in the next 10 years; the risk with the highest impact in this category, though, is ‘Major systemic financial failure’. I will have to go into the report in more detail. It is quite comprehensive).

Be it as it may, the findings of the survey are not only of general, social and political interest, but also highly relevant for the insurance and reinsurance industry and their risk management, which is why Swiss Re (one of the biggest reinsurance companies world-wide) and Zurich Insurance Group were partners of the survey and its analysis. Risks like the one on second position in the category Environmental risks – extreme weather phenomena like storms and floods -, consequences of  climate change (forth position) and problems related to critical water supply (or lack thereof) are of significant concern to insurance and reinsurance companies.

Thus, the topic could be interesting for classes in insurance companies. I am considering sampling some of the survey questions, discussing the issues behind the questions, maybe adding some case studies or other reports on single risks and comparing the class results of the survey with the results reported in the Global Risk report.

Their is an appendix to the Global Risk Report 2014 that gives definitions of the 31 risks of the 2014 survey. Some of these could be cut up into match-the-risk-with its-definition cards.

You can also watch the video conference on the report 2014 at forumblog.org/2014/01/press-conference-global-risks-2014-report/

 

See also article in The Guardian

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