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The Actuary The magazine of the Institute & Faculty of Actuaries

Political unrest joins terrorism as key threat to global business

Political violence, strikes, riots, civil war and war threaten the sustainable growth, continuity and profitability of businesses as much as terrorism, according to Aon Risk Solutions.

The firm has included these factors in its 2011 Terrorism and Political Violence Map for the first time, to take account of an increase in political upheaval in the Middle East and North Africa, and continuing risk of rebellions across the continent of Africa.

Civil unrest and labour disputes arising from austerity measures in Western European nations such as Greece, France, Spain and the UK are also reflected on the map, produced in association with security consultancy firm Janusian, and terrorism continues to severely afflict established conflict zones like Iraq, Afghanistan, Pakistan and Somalia as well as parts of Nigeria and the Sahel region.

"While terrorism remains a very real threat around the world, the reality is that threats to business continuity are also coming from political violence in all its many forms," said Neil Henderson, head of terrorism in Aon Risk Solutions’ crisis management team. "The change in the way the map is scored should not be seen as a decrease in the incidence or severity of terrorist threats, but rather the fact that it provides businesses with a more inclusive view of some of the risk management issues they are facing around the world.

"Businesses should, as a first step, identify the threats they face and implement a comprehensive risk management programme to protect their employees, physical assets and ultimately, their bottom line. As the insurance market for terrorism insurance is very mature and can cope with complex international risks, it should be considered as part of a sound risk management programme."

Dr. David Claridge, managing director of Janusian, added: "Islamist terrorist groups continue to pursue a global agenda, illustrated by plots such as Al-Qaeda in the Arabian Peninsula’s attempt to bomb cargo planes last October last year as well as internationalising local grievances by attacking targets like Moscow’s Domodedovo airport, which was bombed in January. The uprisings in the Middle East and North Africa have highlighted the need for risk managers to take a comprehensive approach by assessing exposure to political violence in all its forms."

Aon’s 2011 Terrorism and Political Violence Map can be found here.