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Global Risks Report 2012: anticipatory safeguards the smart way to go

Reactive nature of some safeguards against global risks can have damaging consequences, report says.

The Global Risks Report (GRR), key elements of which are authored by Swiss Re experts, should be on every thinking person’s reading list, whether they’re insurance industry stakeholders or not. The GRR, published by the World Economic Forum, does after all provide a compelling analysis of the risks which are likely to affect the quality of life on this planet in very fundamental ways. What is arguably different about the 2012 edition is that several of the most serious risks it describes are not theoretical notions but already troubling reality.

The consensus among the 469 experts polled since the publication of the 2011 Report is that, in many parts of the world, people are gradually losing confidence in the ability of their leaders and international governance institutions to protect them and safeguard their interests. The policies, regulations and institutions which serve as protective systems are failing because they are sometimes too rigid and cumbersome to respond appropriately to a rapidly changing environment in a globalised world. These trends are exemplified by responses to incidents and developments such as the Icelandic volcano eruption, the Fukushima earthquake, the upheavals in North Africa and the Middle East as well as the public unrest triggered by the austerity measures in Europe and the U.S.

The GRR’s three areas of focus for 2012 are consequently:

  • The disenchantment with a system unable to create sufficient jobs, deal with the financial challenge of ageing populations and prevent the widening gap between the wealthy and the poor
  • The risks associated with society’s increasing dependence on internet-based systems
  • The inadequacy of the safeguards designed to protect our vital resources, the functioning of markets and the safety of the public

Swiss Re Chief Risk Officer David Cole says that recent years have seen examples of inflexible regulation, like the response to the Icelandic volcanic eruptions, or under-regulation as with the subprime and eurozone crises. He points out that static, unbalanced controls and regulations could lead to unforeseen consequences, inhibiting society's ability to respond effectively to a crisis, to invest for growth and to innovate for overall social development. "We need to get the balance right,” Cole adds, “and to that end, our safeguards must be anticipatory and dynamic to respond more effectively to changes in a hyper-connected world."

Find out more

Expert Spotlight podcast: Anwar Hasan on the methodology behind GRR 2012

Published 11 January 2012

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