Cost-of-living crisis drives political unrest – WTW

Rising energy prices, slower real wage growth increase protests

Cost-of-living crisis drives political unrest – WTW

Insurance News


According to the latest Political Risk Index report released by global broker WTW, the intensity of protests in 2022 and the first quarter of 2023 is closely correlated with rising energy prices, slower real wage growth, and the proportion of wages determined through collective bargaining.

The report found that in 2023, intense protests related to the cost of living were most prevalent in developed countries and wealthier emerging markets. Key findings from the report include:

  • In 2022, cost-of-living protests occurred in 122 countries and territories, with an estimated 3 million person-days dedicated to such demonstrations.
  • Protests focusing on government energy policies are among the major factors driving cost-of-living unrest on a global scale.
  • Wealthier nations are experiencing a trend of increasing property damage and business interruption as a result of social unrest, indicating that this pattern is likely to persist.
  • Countries where collective bargaining is common, particularly in Western Europe, are expected to continue facing intense and economically burdensome protests if inflation remains high.

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Looking ahead to the coming year, the report identifies Argentina, France, Spain, and Italy as the countries most vulnerable to wage protests. The analysis suggests that wage-related protests may intensify in the emerging world throughout 2023.

“The international community continues to grapple with the cost-of-living crises and its wide consequences,” said Evan Freely, global head of financial solutions at WTW. “This report indicates that rising prices, particularly in food and energy, often results in a political cost including more frequent examples of disruptive civil unrest. The economic climate, particularly inflation, is also increasing credit exposure for organisations across the globe.”

“The ramifications are associated with turmoil in rich, poor, and developing countries alike,” said Sam Wilkin, director of political risk analytics at WTW. “Globalisation has seen businesses grow their interests and assets further from home and this report will help boards identify and manage emerging risk areas.”

The analysis presented in the report is based on data from the Armed Conflict Location & Event Data Project (ACLED) and the Global Protest Tracker from the Carnegie Endowment for International Peace (CEIP).

WTW recently announced that it would integrate climate data into its broking property renewals.

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