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The Actuary The magazine of the Institute & Faculty of Actuaries

Conflict and water crisis identified as top global risks

Inter-state conflict is viewed as the number one global risk in terms of likelihood with water crisis such as shortages, floods and quality ranking as highest in terms of impact, according to the World Economic Forum’s (WEF) annual survey. 


The survey, published today ahead of the WEF’s annual meeting in Davos next week, was conducted to prompt discussion on how these risks could be mitigated.

Almost 900 WEF members that took part in the 10th edition of the Global Risks 2015 survey. They rated the water crisis as the greatest risk facing the world. Other top risks alongside that and inter-state conflict are: spread of infectious diseases (2); weapons of mass destruction (3); and failure of climate changes adaptation (5).

The report assessed 28 global risks, grouping them into five categories (economic, environmental, societal, geopolitical and technological) and also considered the drivers of those risks in the form of 13 trends.

It identified the three risks that have intensified the most since 2014 in terms of likelihood and impact. These are conflict (with regional consequences), weapons of mass destruction and terrorist attacks. 

Speaking at the report launch this morning at Bloomberg’s European headquarters in London, WEF lead economist Margareta Drzeniek-Hanouz said: ‘Twenty-five years after the fall of the Berlin Wall, the world again faces the risk of major conflict between states.

‘However, today the means to wage such conflict, whether through cyber attack, competition for resources or sanctions and other economic tools, is broader than ever. Addressing all these possible triggers and seeking to return the world to a path of partnership, rather than competition, should be a priority for leaders as we enter 2015.’

The report also noted that concerns remain over the world’s ability to solve its most pressing societal issues, as societies are under threat from economic, environmental and geopolitical risks.

It said that the rapid rate of technological innovation, from synthetic biology to artificial intelligence, outpaced governance. Regulation is underdeveloped and creates new risks, but innovation is critical to global prosperity, it said.

Apart from assessing the likelihood and potential impact of these 28 global risks, the report examined the interconnections between risks. It analysed three specific cases: the interplay between geopolitics and economics; the risks related to rapid and unplanned urbanization in developing countries; and one on emerging technologies.

It said a better understanding of global risks and the interconnections between them was key to prompting discussion about how to prepare, mitigate and prevent them.