Global risks ranging from environmental disaster, interstate conflict and disruptive technology, are multiplying faster than ever, according to the latest annual survey of the risk landscape from the World Economic Forum (WEF).

Launched in the run up to the Davos meeting of world leaders in Switzerland, the Global Risk Report 2016 forecasts an increased likelihood for all the risks it covers, and with greater impacts, over the coming decade.

Seven hundred and fifty risk experts that contributed to the survey of 29 separate global risks agreed that interconnections between risks are growing stronger. This is creating a dangerous synergy that could have profound implications for society and the global economy.

For example, the apparent lack of significant impact of climate change mitigation and adaptation appears to be contributing to water crises, which in turn drive political instability and involuntary mass migration. The number of people forcibly displaced in 2014 was nearly 60m, according to UNHCR, almost 50% more than in 1940 during WWII.

Understanding such interconnections is increasingly important in helping policymakers prioritise areas for action, as well plan for contingencies, according to Margareta Drzeniek-Hanouz, head of global competitiveness and risks at the WEF. “We know that climate change is exacerbating other risks such as migration and security, but these are by no means the only interconnections that are rapidly evolving to impact societies, often in unpredictable ways,” she said.

This was highlighted in a 2015 Lloyd’s report – Food Shock Security – which contained scenarios that showed that climate events related to El Nino could potentially lead to food riots and falls in the US and UK stock markets.

Risk connectivity is an issue for the private sector too, says Nick Beecroft, manager of emerging risks and research at Lloyd’s. “Insurers at Lloyd’s are well placed to work with clients to better understand risk connectivity and complexity and develop new solutions to protect against the potential for growing loss exposures,” he said.

Beecroft also notes the wide variation in the different risks prioritised by private sector respondents to the survey. For example, cyber risk is one of the top concerns in North America whereas environmental risk is a priority in Asia.

Global risks identified as serious because of their combined impact and likelihood, include some economic risks, such as “fiscal crises in key economies” and “high structural unemployment and under employment”.

These are complemented by “cyber attacks” and “profound social instability”. WEF’s experts said these categories reflect the potentially profound impact of the so-called fourth industrial revolution on the economy and society, and the report emphasises the need to safeguard the future benefits of technological revolution.

Business leaders do seem to be taking on board the implications of many of the risks identified in the report, especially those around reputation and supply chain, according to John Drzik, president of the global risk and specialties unit at Lloyd’s broker Marsh, a strategic partner of WEF.

“In cyber and in geo-political risk insurance as well as other areas there will be opportunities for businesses to extend their insurance coverage,” Drzik told lloyds.com. “There are growing concerns about property damage and business interruption stemming from cyber [attacks] and many buyers want to obtain higher limits.”

Although technological crises have yet to impact economies or securities in a systemic way, cyber risk was placed first by business leaders in eight countries, including the US, Japan, Germany, Switzerland and Singapore.

A 2015 study by Lloyd’s and the Cambridge Centre for Risk studies – Lloyd’s City Risk Index 2015-2025 – which quantified for the first time the economic harm to 301 cities around the world from 18 threats, found that cyber attack alone could put about $300bn of projected GDP at risk over the next decade.

Download the Global Risks Report 2016, 11th Edition at www.weforum.org

Top five global risks in terms of impact

  1. Failure of climate change mitigation and adaptation
  2. Weapons of mass destruction
  3. Water crises
  4. Large-scale involuntary migration (societal risk)
  5. Energy price shock

Top five global risks in terms of likelihood

  1. Large-scale involuntary migration (societal risk)
  2. Extreme weather events
  3. Failure of climate change mitigation and adaptation
  4. Interstate conflict with regional consequences
  5. Major natural catastrophes

Source: Global Risks Report 2016, World Economic Forum