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Global Insurer Warns Businesses That Current Events Could Be Catalyst for Civil Unrest


As the state of public discourse could become a flashpoint for demonstrations and dissent, differentiating between peaceful protests and violent public disturbances is vital.

Businesses should prepare for a rise in strikes, riots, violent protests and other civil unrest as the cost-of-living crisis follows hard on the heels of the Covid pandemic, according to Allianz Global Corporate & Specialty (AGCS).

Risks to businesses during periods of civil unrest include the cost of disruption to the business, along with the potential for material damage to buildings or assets.  

“Civil unrest increasingly represents a more critical exposure for many companies than terrorism,” says Srdjan Todorovic, currently head of crisis management, UK and Nordics, at AGCS, a global provider of corporate insurance. “Incidents of social unrest are unlikely to abate any time soon, given the aftershocks of Covid-19, the cost-of-living crisis and the ideological shifts that continue to divide societies around the world. 

Todorovic, who in July will become head of global political violence and hostile environment solutions at AGCS, said businesses should be alert to suspicious indicators and designate clear pathways for de-escalation and response.

The United Nations has warned of the destabilizing potential of disrupted supply chains and surging food, fuel and fertilizer prices, particularly given that Russia and Ukraine represent around 30 percent of the world’s supply of wheat. 

“All of this is planting the seeds for political instability and unrest around the globe,” UN Secretary-General António Guterres said in March 2022. 

Meanwhile, the risk consulting firm Verisk Maplecroft sees a rise in civil unrest as “inevitable” in middle-income countries that were able to offer social protection during the pandemic but will now find it difficult to maintain that level of spending as the cost of living surges. 

According to the Verisk Civil Unrest Index Projections, 75 countries will likely see an increase in protests by late 2022, resulting in, for example, a higher frequency of unrest and more damage to infrastructure and buildings. 

The outlook is most bleak for the 34 countries that face significant deterioration by August 2022. More than a third of these nations are in Europe and Central Europe (12), followed by the Americas (10), Africa (six), Middle East and North Africa (three) and Asia (three ).

Economic and insured losses from previous protests have been significant, creating substantial claims for companies and their insurers, according to AGCS.

In 2018, the Yellow Vest movement in France rallied to protest fuel prices and economic inequality, with French retailers losing $1.1 billion in revenue in just a few weeks. A year later in Chile, large-scale demonstrations were sparked by an increase in subway fares, leading to insured losses of $3 billion

In the U.S., the 2020 protests over the death of George Floyd in police custody are estimated to have resulted in over $2 billion in insured losses, while the South African riots of July 2021, which followed the arrest of former president Jacob Zuma, and were fueled by layoffs and economic inequality, caused damage totaling $1.7 billion

Earlier this year in Canada, France and New Zealand, demonstrations against Covid-19 restrictions included convoys of vehicles creating disruption across major cities.

A network of disruption

Social media networks play an increasing role in mobilizing protesters and intensifying social unrest, suggesting that national borders may play a smaller role in motivating protestors. 

“The unifying and galvanizing effect of social media on such protests is not a particularly recent phenomenon, but during the Covid crisis, it combined with other potentially inflammatory factors, such as political polarization, anti-vaccination sentiment and growing mistrust in government, to create a perfect storm of discontent,” Todorovic said. “Geography was less of a barrier, too. Those with like-minded views were able to share opinions more easily and mobilize in greater numbers more quickly and effectively. In a world where trust in both government and media has fallen sharply, misinformation could take hold and partisan grievances be intensified and exploited.”

Todorovic predicts targets of civil unrest, or collateral damage arising from it, could include government buildings, transport infrastructure, supply chains, retail establishments, foreign-owned enterprises, fuel stations, distribution centers for critical goods and tourism or hospitality businesses.

Review contingency plans

Companies should review and update business contingency plans and consider supply chain vulnerabilities. They may also wish to review insurance policy terms to determine whether property policies cover political violence claims.

“The nature of political violence threats is evolving, as some democracies become unstable, and certain autocracies crack down heavily on dissenters. Unrest can occur simultaneously in multiple locations, as social media now facilitates the rapid mobilization of protestors. This means large retail chains, for example, could suffer multiple losses in one event at various locations in a country,” Todorovic said.

Best practices for how companies should prepare for or respond to civil unrest incidents are outlined in Allianz Risk Consulting’s civil unrest risk bulletin

Specifically, the bulletin details a list of technical recommendations to help mitigate threats associated with civil unrest situations and outlines pathways for de-escalation, communication and response.

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