Systemic risks are high impact or catastrophic events where major second, and third-order effects occur and travel great distances i.e. the COVID-19 pandemic.
They can be global in impact, often hitting multiple industries, countries and billions of people simultaneously, with potentially devastating consequences that can shift the way the world operates overnight. We learnt from the COVID-19 pandemic that businesses, the insurance industry and governments were not prepared to handle such events individually. It is now more important than ever to prepare and mitigate against systemic risks and learn from the lessons of the past.
Over the last 12 months, Lloyd’s Futureset has been working with underwriters, brokers, customers and research partners to define the landscape of systemic risks and the actions needed to improve society's resilience.
Our work has convened experts, industry leaders and new thinkers to address the issues we are facing today, but we must look further. In early 2022, Lloyd’s Futureset, in partnership with the Cambridge Centre for Risk Studies, will deliver a macro view of the systemic risk landscape and release a comprehensive digital tool that will provide insight and analysis into the major systemic risks facing society in the changing risk landscape.
Until then, here are six crucial systemic risk categories identified in our research you need to prepare for.