Best’s News & Research Service - May 06, 2024 12:54 PM (EDT)
Allianz Report: 2024 Could Be Unprecedented Year for Political Violence
OLDWICK, N.J. //BestWire// - Srdjan Todorovic, head of political violence and hostile environment solutions at Allianz Commercial, details the findings of a new risk report that shows terrorism, civil unrest and environmental activism as intensifying risks in a volatile geopolitical environment.
Srdjan TodorovicFollowing is an edited transcript of the interview.
Q: Why is 2024 shaping up to be an unprecedented year for political violence concerns?
A: I think it's key to mention that there's concerns at the moment and I think there is a number of things. We're some way through the year and it's been relatively OK, but I'll be careful what I say with things going on at the moment. But why is it? Well, I think it's been a number of factors over the years that has kind of led to this.
Naturally, a large majority of the world's population is going into election. Usually elections bring the worst, I would say, sometimes in politics and in people. I would say that that is one of them; so, the political element. We've got a lot of elections this year. There has been a shift in the type of politics that we're seeing on the spectrum. We are talking a relative shift, large shift towards the right wing of politics. We also are talking about a rise of populism, which is often, I would say also my personal view has led to a kind of a, I wouldn't say politics of hate so much, but there is definitely politics of blame potentially in the public domain.
Q: A tribalism?
A: I guess so, yes, there is obviously, for example, America First Policy was mentioned, to name one, but there are similar types of policies in other countries that are kind of picking up support, let's say, across the spectrum. That is ultimately one of the things driving this.
Then looking back a little bit, linking politics also to economic situations, there is a big rise in mistrust in politicians and politics. So, you have that populism with the mistrust going hand in hand. But it's linked a lot to potentially, well, my view, linked to the economic handling, sometimes mishandling of the COVID period and the subsequent recovery from.
I think some would argue you can't account for everything, you can't have policies for everything it's difficult to control the global economy. But with inflation, with rising unemployment, although that has recovered a lot over the last two years probably in most countries, the reduced quantity or reduced flow of goods and trade, that's had an impact obviously in the pricing, but also the ability to boost economic recovery. I think you've got these two factors working hand in hand and that's causing naturally issues and resentment with people and they are also willing to hit the streets to protest against what they perceive as mismanagement of economies, of sometimes corruption, etc.
Then there are a couple of other things that are maybe an elephant in the room: geopolitics, and what we've seen in the sphere is actually two quite unprecedented events. War in Ukraine from 2022 is one big event that's had an impact economically, but also politically on individual states, but generally. And obviously the Israel and Gaza conflict, which splits many opinion across the world, not just in the U.S., but elsewhere.
So, these are the things that are pushing it. The issues and the concerns in 2024, elections can be the trigger factor of these problems, as in of violence potentially, but they're not the cause of them, if you understand what I mean. I guess the other thing to mention is the societal and cultural inequality potentially, or the perceived view of injustice in certain societies, whether it's racial injustice or economic injustice. These are the things that are culminating now in a 2024, which is, we think we feel it's going to be quite turbulent.
Now, as I said, we've gone through almost a quarter of the year, or we have gone through the quarter of a year, and we have had relatively little activity from this perspective, but there's still a long way to go.
Q: What role do you anticipate technology and artificial intelligence will play in this election cycle?
A: I would say it should be a force for good, actually, technology, and it should help elections and help cycles and help weed out the false news from the truth or truth from the false news, shall I say, but it actually it's not as clear cut, as that and I think that it is a force for good. It can be if it's used in the right way.
What we've seen is that it's been used to spread misinformation, the alternative narrative, or the alternative truth that sometimes people call it, and actually you know the AI element, which is for me very recent and I'm still learning about it, is the impact of AI from what I can see let's say, generating false videos can be a kind of a match that ignites potential violence and that's regardless whether it's true or not. Once the cat is out of the bag of a video whether it's false or not people can make their own mind up, and sometimes they're not interested in the truth.
There is an element of risk associated with this, and I think we're at sort of a crucial point now of technology and politics and elections, is that how do we put rules around this? It's actually incredibly difficult. The speed of news, technology, including social media traveling is also something that's a concern of ours. We saw that in 2020 with Black Lives Matter and other riots and civil commotions around the globe since then. So, these are the things that AI and technology kind of raises these points..
Q: The report notes environmental activism incidents increased by around 120% between 2022 and 2023.
What's behind that surge, and do you think that this is a trend that's going to continue?
A: I do think it's a trend. I think it's definitely as a political violence and terrorism underwriter, we often talk about the next big issue, the next potential problem for our clients. Yes, we've seen an increase in rise and it's actually there's more coverage about it as well, not to mention the recent attacks by I think a group called Vulcan in Germany against the power grid which has affected obviously Tesla's production in Germany.
But what we saw, what's driving this really is facts, is that we've seen record temperatures in 2023. It's been the hottest year on record. 2024 is showing signs that it's also going to be the maybe the new hottest year on record. So, when people see this and they see the impact that it has on life and ability to kind of live and travel and conduct business and whatever, that you naturally see sometimes extreme acts.
Sometimes what we call what I would say active nuisance, so whether people are blocking roads or not. What we anticipate, and unfortunately this is something that the governments will also have to step up for is, there's been a rowing back of environmental targets across the world and I'm talking from the U.K., specifically. I mean our government has moved some net zero targets further on so they're stretching this out and that has an impact on people and their views of the government, but also kind of how important this topic is. Once you see this happening and you see that active nuisance or protest or petitions don't work, you may see a more extreme approach to environmental activism like we saw in Germany in March of this year. So, these are the things that are moving, but ultimately it can vary depending on country to country.
Q: With the sustained political violence and civil unrest activity and evidence around the world, do you see interest in political violence coverage increasing in 2024?
A: I do, and I've seen that over the last 18 months, certainly since the Ukraine conflict. We've seen buyer behavior changing, so clients have really focused on the coverage that they're buying, the wording, the extensions that they're buying. So, there's been a more focus on specific risks, either in countries or the type of businesses that they operate.
What I mean by that is if you're a retail versus a manufacturing site, there are two different risks associated with that. Overall, the political violence landscape has resulted in changing behavior of clients and the type of insurance product that they buy, the limits that they buy. And yeah, it's absolutely driving a lot of the conversations that we're having with brokers and clients in 2024.
(By John Weber, senior associate editor, AM Best TV: John.Weber@ambest.com)