Businesses must prepare for increased social unrest as the cost of living continues to rise and residents discontent in many countries. The insurance company Allianz warns of this, and advises companies to review and adjust their contingency plans if necessary.
Strikes, riots and violent protest movements pose a danger to businesses, because not only buildings or infrastructure can be damaged, but also business operations can seriously disrupt. Supply chains can also be disrupted. For example, previous protests in France, Chile, the United States and South Africa have cost companies billions.
“Social unrest poses a risk more serious than terrorism for many companies,” said Serjan Todorovic, Head of Crisis Management at Allianz. He said social unrest was unlikely to subside anytime soon given the aftermath of the coronavirus pandemic and the cost of living crisis.
According to the insurance company, the influence of social media is also playing an increasing role in mobilizing protesters and fueling social unrest. Like-minded people can share ideas more easily and mobilize in large numbers more quickly and effectively across social media platforms.
Allianz said government buildings, transportation infrastructure, supply chains, retail properties, foreign-owned businesses, gas stations, distribution centers and tourism or hospitality companies could be targets of civil unrest.
According to research firm Verisk Maplecroft, 75 countries are likely to see an increase in protests by the end of 2022. The outlook looks bleak for 34 countries where the situation is already expected to deteriorate significantly by August. More than a third of these countries are located in Europe and Central Europe, followed by the Americas, Africa, the Middle East and North Africa, and Asia.
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