sigma Resilience Index 2020: global resilience put to the pandemic test

Our latest annual resilience indices show profound shifts in economic and household resilience from the COVID-19 pandemic. The crisis is expected to reduce global macroeconomic resilience by close to 20% in 2020 as governments use up fiscal and monetary headroom with stimulus measures. Post-COVID-19, we expect the global economy to be almost 30% less resilient than in 2007 than before the global financial crisis (GFC).

Among major economies, the UK, Japan and the US will see fiscal buffers depleted most and their resilience index scores decline furthest, although they should still rank higher than many European countries.

Insurance resilience weakened in 2019, the indices show, pushing the combined insurance protection gap for mortality, health and natural disaster risks to a new high. The global insurance protection gap for health, mortality and natural catastrophe risks reached USD 1.24 trillion in 2019, with health and mortality exposures accounting for more than 80% of the total.

We expect the COVID-19 crisis to increase health and mortality protection gaps as households grapple with lower incomes, higher healthcare costs and the financial consequences of losing a breadwinner as a result of the pandemic.

• Global macroeconomic resilience was stable in 2019, but the world economy was less resilient going into the COVID-19 crisis than it was before the GFC of 2008-09, the last major downturn.
• China's economic resilience score is relatively unchanged, primarily because a swift response enabled it to reopen its economy earlier than many others.
• Switzerland, Finland and Canada remain the world's three most resilient economies, reflecting their comprehensive economic strength against future crises.
• We expect COVID-19 to put health resilience in the spotlight in 2020. The impact will vary depending on countries' health infrastructure and virus containment policies, but emerging markets will likely be more vulnerable given typically lower health resilience.
• Global mortality resilience declined most in 2019, driven by Asia-Pacific; health resilience was stable despite some deterioration in emerging markets. Natural catastrophe resilience was lowest of the three risk areas.