The interconnected nature of finance and trade means risk can spread faster and further than ever before, according to Lloyd’s.

Its latest report on globalisation says fast-track economic growth through the removal of trade barriers has also amplified downsides.

Chairman Lord Levene says globalisation isn’t “out of control”, but he believes preparation for worst-case scenarios is lacking.

“If globalisation brings rewards, it also brings responsibility,” he said.

“Multinational businesses, which operate with offices, plants and factories in hundreds of countries, which source capital and repay shareholders across the world, have a central role in shaping globalisation.

“If they can manage their complex business structures and minimise the risks they contain, perhaps governments too can find the legal framework and intense co-operation required to govern a globalised economy.”

The report investigates six chief areas of risk arising from globalisation, covering economic, global pandemic, infrastructure, supply chain, food security and geo-political risks.

In describing a “tidal wave of globalisation” the report finds two distinct dimensions of risk have emerged.

“The first is that risks now transmit much further and rapidly than previously,” the report said.

“The second is that, at times, they jump traditional risk boundaries and take on systemic properties in which the source and final impact of the risks may not be regarded as connected. Cascading failures in which the shock waves cross boundaries and can have a major global impact arise from the nature of globalisation.

“Managing these requires a rethinking of the nature of risk and contagion in the 21st century.”