AXA Future Risks Report: what are tomorrow’s risks?

A pessimist guide to tomorrow’s greatest threats

 

For the last 7 years, AXA has published its AXA Future Risks Report. This year, they partnered with IPSOS and the geopolitical analysis firm Eurasia Group. The study was led in July 2020, in the middle of a worldwide pandemic, and interrogated risk experts and citizens around the globe.

Obviously, given the context, the pandemic risk is the center of attention. Although last year it was clearly overlooked and ranked at the 8th place in the future risks ranking, this year the risk experts put it as 1st risk for the next 5 to 10 years. The two following risks are climate change and cyber security.

Axa Future Risks Report 2020

 

1. The impact of pandemics and infectious diseases

Indeed, unless you have been living under a rock for the last 9 months, you are aware we are in the middle of a worldwide pandemic. Logically, this reflects in the risk experts’ concerns, as the number of them that ranks pandemics as a major emerging risk more than doubled, from 23% to 56% compared to 2019.

However, pandemics and infectious diseases are not just the top emerging risks because of the very current and tangible threat to the general population’s health. The lockdown and the Covid-19 have had important consequences and impacts. Indeed, the spiraling public debt, the escalation of geopolitical tension, growing mental health issues and surging inequalities are other risks that were accelerated by the pandemics. Furthermore, the public attention, both from governments and citizens, dedicated to the coronavirus crisis will likely steal the thunder of other major but less imminent threats, steering even more other underrated risks.

 

2. Climate change

Last year, climate change was the number one risk according to risk experts worldwide. This year, it has been overshadowed by the current sanitary crisis and is now 2nd in the risk perception ranking.  It seems that the short-term issues have overshadowed the longer-term threats as Thomas Buberl highlights. This observation is even truer for the regions thar are the most polluting and most at risk of climate change consequences: Asia and Americas. Indeed, in North America, for instance, the share of experts worried about climate sunk from 71% in 2019 to 46% this year.

 

3. Cyber risks

Cyber security is still considered as one of the major risks for the next 5 to 10 years, although it lost one place in the ranking (from 2nd to 3rd). Surprisingly, or not, the lockdown has cyber security needs.  Remote working is the new normal.  The use of online devices and systems for both private and professional communications has increased the points of cyber vulnerability. Additionally, homeworkers may also be using personal devices, which, unlike office equipment, may not be configured with the latest cyber defenses.

Working remotely also means less fluid communications between teams or departments, hackers tested the limits during the lockdown, and from February to March 2020, the number of phishing e-mails has increased by 667%, as revealed by Infosecurity Magazine.

 

4. Overlooked risks

Last year, pandemics and infectious diseases was one of the overlooked risks, but as we all know, it turned out that the risk was way higher than foreseen by the risk experts. What are the current risks that might be overlooked?

  • Mental health issues, rates of mental health issues are higher than ever, and the lockdown took a toll on mental public health.
  • De- and mis-information, specifically in the period of elections in various region of the globe
  • Advanced technologies and the use of AI, as well as deontology and ethics in the use of AI and big data. Even Elon Musk is worried about that ! Furthermore, Nancy Bewlay, Global Chief Underwriting Officer of AXA XL adds “Advanced technologies, such as AI and machine learning, are increasingly being used to predict the future. There’s a real risk that these predictions will be wrong or biased if the models are incorrect or are not based on enough data.”
  • Finally, as the focus is on Covid-19 regarding health issues, experts are less concerned about antimicrobial resistance and superbugs, this risk tumbled from 29% last year to 9% this year. There may have been a decrease in the perceived severity of antimicrobial resistance, but it still has the potential to create a future health crisis. The report states “Global spread of bugs’ resistance to common antibiotics could dramatically raise the risk level of common healthcare treatments such as chemotherapy, organ transplants, caesarean sections, and hip replacements. This would not only prolong illness but also significantly increase the cost of healthcare. The impact of these risks may be less sudden than a pandemic, but the long-term effects have the potential to be equally devastating.”

 

5. Towards more interdependent risks

Finally, the AXA Future Risk report highlights the fact that risks are more and more connected and interdependent. The current pandemic exemplifies how they are global, complex, and, therefore, difficult to address. Indeed, the pandemic impacted health (obviously), macroeconomic, debt, poverty, mental health…  This interlinking requires a global, interdisciplinary, and multi-stakeholder approach to prevention and protection. Another good example of that is the impact that the misinformation and spreading of fake news can have on other risks’ perception (climate change, pandemic…). As one of the experts who answered to the study put it “Perhaps the biggest emerging risk is our ever-reducing

 

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