The Butterfly Effect of the War in Ukraine and How it Impacts your Business
The war in Ukraine has triggered a global economic crisis which was inevitable and is likely to cause widespread social unrest.
Rising fuel and food prices are in particular challenging for the developing low and middle income countries, but social unrest has also occurred in developed countries and taken form as spontaneous, large scale and unpredictable.
Insurance coverage for social unrest can disappear instantly as seen in Chile in 2019, when widespread and unexpected riots caused $4.5bn in damages across the country and the insurance industry reacted by immediately excluding the coverage. Social unrest is not just a headache for businesses, it is a key concern to the insurance industry and Lloyd’s of London.
The availability of protection for social unrest and war coverages is likely to decrease in the coming years as the market starts feeling the impact of the butterfly effect from the war in Ukraine.