Prolonged recession likely due to COVID-19, finds WEF report

Prolonged recession likely due to COVID-19, finds WEF report | Insurance Business

Prolonged recession likely due to COVID-19, finds WEF report

Risk managers predict that a prolonged global recession due to the coronavirus pandemic is likely coming our way, according to “COVID-19 Risks Outlook: A Preliminary Mapping and Its Implications,” a survey published by the World Economic Forum (WEF) in partnership with Marsh & McLennan and Zurich Insurance Group.

The nearly 350 respondents listed the economic fallout from COVID-19 as one of their top concerns. The repercussions include a recession, weakening in the fiscal position of key economies, stricter restrictions on the cross-border movement of goods and people, and the collapse of a major emerging market. Fifty per cent of risk managers surveyed expect bankruptcies and industry consolidation as well as challenges in industries struggling to recover and high levels of unemployment, especially among younger populations.

However, the report also notes that risk managers predict a “green recovery” and more resilient, “cohesive, inclusive and equal societies” that can come out of the crisis if leaders act quickly.

“The crisis has devastated lives and livelihoods. It has triggered an economic crisis with far-reaching implications and revealed the inadequacies of the past,” said Saadia Zahidi, managing director of the World Economic Forum. “We now have a unique opportunity to use this crisis to do things differently and build back better economies that are more sustainable, resilient and inclusive.”

Meanwhile, John Doyle, president and CEO of Marsh, stated that organizations were already dealing with a “complex and interconnected global risk landscape” before the crisis hit that is now intensified.

“From cyber threats to supply chains as well as the well-being of their colleagues, businesses will now rethink many of the structures they formerly relied on,” said Doyle. “To create the conditions for a speedier recovery and a more resilient future, governments and the private sector need to work together more effectively. Along with major investments to improve health systems, infrastructure, and technology, one of the outcomes of this crisis has to be that societies become more resilient and capable of withstanding future pandemics and other major shocks.”