Lloyd’s says the global economy could be exposed to losses as high as $US50 trillion ($74.30 trillion) over the next five years should a “hypothetical geopolitical conflict” occur.

The warning, as part of Lloyd’s systemic risk series with the Cambridge Centre for Risk Studies, notes the closure of major trade routes due to wartime danger could mean billions of dollars of goods each day fail to reach their destinations or are forced onto alternative paths.

Lloyd’s puts the likely loss from a conflict at $US14.5 trillion ($21.55 trillion), with a range of $US7.8 trillion ($11.59 trillion) to $US50 trillion, depending on the unrest’s severity. 

Corporate affairs director Rebekah Clement says the London market supports “public-private efforts” to avoid crises caused by a shortage of commodities and ensure resilience to such risks.

She also encourages businesses to take on protections such as political risk insurance, contingent business interruption cover, credit insurance and marine and aviation cover. “The value of insurance also extends to the compounding secondary impacts of geopolitical conflict, including downstream delays and interruptions by impacted trading partners and suppliers,” Ms Clement said. 

Lloyd’s systemic risk series has also examined extreme weather, cyberattacks and economic stagnation.