Allianz Risk Barometer 2024 -
Rank 8: Political risks and violence

Businesses and their supply chains face considerable geopolitical risks with war in Ukraine, conflict in the Middle East, and ongoing tensions around the world. Political risk in 2023 was at a five-year high, with some 100 countries considered at high or extreme risk of civil unrest [1]. Further unrest is expected in 2024 as economic gloom continues, particularly in debt-crisis countries, while protestors calling for action about a number of different causes will aim to cause more disruptive events.

The year was marred by multiple protests in France against pension reforms and the murder of teenager Nahel Merzouk, which led to intense violence, property damage and looting. The continued rise of populist and far-right parties in Europe resulted in electoral success in the Netherlands and Slovakia, reinforcing the political shift of 2022, when Italy elected a party with neo-fascist roots, Hungary re-elected Viktor Orbán, and the far-right Sweden Democrats took over 20% of the votes in a general election.

Turmoil has also been seen in numerous African countries, notes Srdjan Todorovic, Head of Political Violence and Hostile Environment Solutions at Allianz Commercial, driven by the September 2022 coup in Burkina Faso, and further successful coups in Niger and Gabon in 2023. While these coups have been relatively peaceful, Sudan is rapidly escalating into civil war, mainly in its capital Khartoum. Economic difficulties are challenging many countries, in particular Tunisia, which teetered on the edge of violence as President Saied continued to rule through decree and without a Parliament.

Latin America is a region that commonly sees big shifts in politics and pre- and post-electoral violence, and 2023 was no exception. Brazil experienced an attack on its National Congress building after the re-election of the leftist Lula da Silva and ousting of Jair Bolsonaro, while Argentina saw mass protests against the newly elected populist, Javier Milei. In contrast, Guatemala saw supporters of the president elect, Bernardo Arévalo, protesting against institutions halting his inauguration. While these are mostly intra-state issues, potential cross-border violence could be ignited with Venezuela’s territorial dispute with Guyana.

The defining moment of 2023 was the Hamas attack on Israel and the subsequent war in Gaza. This has not only led to thousands of innocent deaths in Gaza but has also increased pro-Palestinian and pro-Israeli protests globally. The conflict has quickly escalated beyond its defined borders with the pro-Hamas entities attacking shipping and launching drones and ballistic missiles towards Israel.

Amid all this conflict, 2024 is also a record-breaking election year, when as much as 50% of the world’s population could go to the polls, including in India, Russia, the US, and the UK. So many elections raise concerns about the fueling of populism and polarization which may manifest in increasing civil unrest activity. Disillusionment with ruling incumbents and concerns over the fairness of elections, fueled by social media, could also ignite unrest in certain territories.

“We anticipate continued challenges to come,” says Todorovic. “In addition to increased risk of election-related SRCC [strikes, riots and civil commotion], we see clear trends in increased risk of terrorism in Western Europe and North America. This is primarily driven by the Israel and Gaza war leading to a radicalization of certain parts of the population in these regions.

“Further, with more states or governments asserting their territorial claims over others, as well as claims of border insecurity, the risk of pre-emptive cross-border wars is increasing in certain regions through 2024.”