Lloyd’s has outlined emerging geopolitical risks and provided practical advice on how businesses can mitigate them as well as identifying opportunities for the insurance industry to help by developing solutions.

It proposes a series of steps such as assessing supply chain exposure and taking precautions to safeguard intellectual property (IP) and trade secrets against major cyber-attacks.

A new report, produced in partnership with the University of Cambridge’s Centre for Risk Studies, explores the changing geopolitical risk landscape over the last decade.

It focuses on the ten most pressing risks today: The Impact of COVID on Geopolitical Relationships; Greater Power Rivalry; Localism vs. Globalism; Multinationals at Risk; Terrorism and Armed Conflict; Cyber and the New Tech Arms Race; Social Discontent and Local Conflicts; Political Change; Politics vs. Economics of Climate Change; and Migration and Demographics.

The report says the post-pandemic decade is likely to see profound changes in geopolitical configurations, balances of power and “even fundamental worldviews”.

“Over the next ten years ... the current crisis will not end once the vaccine rollout is completed, lockdowns lifted, and freedom of movement re-established,” it says.

“Fortunately, though … the COVID crisis has also exposed areas of strength, resilience, and innovation that, if properly harnessed by policymakers, civil society, and business, may very well create new opportunities from the changing landscape.”

University of Cambridge Chief Scientist Andrew Coburn says for insurers, the changing nature of geopolitics “poses a significant challenge to an industry traditionally associated with protecting physical assets” and urges innovation.

Geopolitical power centres have shifted since the global financial crisis, driven by five macro-trends: increased regional instability; return to a state of great power competition; the decline of the US role as global policeman and the transition to multi polarity; increasing inequality and social unrest; and rising populism and the erosion of the free market model.

“The western-dominant, American-led, liberally fiscal, status quo that defined the political world and economic growth for much of the second half of the 20th century no longer feels like a realistic barometer for how future events – wars, riots, elections, treaties – will play out on the global stage,” the report says.

“Instead, we face a future in which multipolarity - the equal distribution of power between two or more states - changes the behaviour of risks to the increasingly connected global system.”

See the report here.