The world is experiencing a surge in civil unrest incidents driven by a cost-of-living crisis, according to specialty (re)insurance group Chaucer.
A recent analysis by the company revealed that incidents of global civil unrest have risen by 3% in the past year, reaching 30,376 compared to 29,535 in the previous year.
The cost-of-living crisis, characterised by double-digit inflation and rising interest rates, has significantly eroded real incomes in many developed countries. Particularly affected are several European nations, with the Eurozone’s annual inflation rate hitting a record high of 8.4% in the previous year.
France and Germany have witnessed significant spikes in civil unrest incidents in the first quarter of 2023 when compared to the same period in the previous year.
In France, the number of social unrest incidents increased by 55%, with 249 incidents reported in Q1 2023, compared to 161 in the same period the previous year. The public outcry against pension reform has been a major contributing factor to the wave of protests, as hundreds of thousands of protestors have taken to the streets of Paris, accompanied by coordinated strikes that have resulted in widespread disruptions, including public transport cancellations.
Germany, on the other hand, saw a 13% increase in social unrest incidents during Q1 2023. The country has faced sharp rises in energy prices following the invasion of Ukraine, further exacerbating the cost-of-living crisis.
The increasing frequency of civil unrest has highlighted a gap in insurance coverage for damage resulting from strikes, riots, and civil commotion (SRCC), according to the report. Many insurers have removed this coverage from their standard policies due to the long-term rise in civil unrest since the global financial crisis.
Craig Curtiss, senior class underwriter, political violence & crisis management at Chaucer, said this gap in coverage has created a demand for specialised (re)insurers who are stepping in to provide protection against SRCC risks.
“Specialist (re)insurers have stepped in to meet the demand from corporates to cover the shortfall created by general property insurance policies excluding this coverage,” said Curtiss. “Demand from international brands in retail and leisure and from financial services businesses is particularly strong.”
What are your thoughts on this story? Feel free to share your comments below.