A new report paints a bleak picture of an “overstretched global food system” collapsing under the pressure of climate change-induced weather catastrophes, plant pandemics and surging food prices, with the potential to trigger economic and humanitarian crises.

The Lloyd’s paper warns “sudden systemic shocks” such as weather events and disease could disrupt food supply, because of the interconnectedness of global production.

It says 1 billion people go hungry every year, and that figure could treble by 2050.

The impact of El Nino, the spread of a wind-blown fungal disease called wheat rust in Russia and warmer temperatures in South America could lead to wheat, maize, soybean and rice prices quadrupling.

The report says the vulnerability of world food supplies may have repercussions for communities, businesses and governments.

“A combination of just three catastrophic weather events could undermine food production across the globe.

“This series of events has the potential to lead to food riots breaking out in urban areas across the Middle East, North Africa and Latin America, leading to wider political instability and having knock-on effects for a wide range of businesses.”

Lloyd’s says there are implications for the insurance industry – a systemic shock to global food supply could trigger significant claims across multiple classes, such as terrorism, political risk, business interruption, marine and aviation, agriculture, product liability and recall, and environmental liability.

“The insurance industry is [also] in a position to make an important contribution to improving the resilience and sustainability of the global food system, by encouraging businesses to think about their exposure to risks throughout the food supply chain and by providing innovative risk transfer products to enhance global resilience to systemic food system shocks.”

Lloyd’s Head of Asia-Pacific Kent Chaplin says the insurance industry stands to grow stronger by considering a variety of scenarios around food “mega-risks” and ensuring these are effectively managed. In doing so, the whole community would benefit.

“In this extreme food shock scenario, insurers could be faced with a variety of complex claims… and their ability to pay claims quickly will be an important factor for post-shock recovery.”