The effect of GFC on public finances has led many governments to adopt austerity measures, including spending cuts and tax increases. This, in turn, has led to popular opposition movements and street protests, including the Occupy movement in the United States and elsewhere.
In recent years, the Black Lives Matter movement has led to an increase in protests in the United States and around the world, according to Chaucer. Analysis of US data by the reinsurer revealed that the number of major protests jumped 156% last year, from 2,553 to 6,545, spurred on by the Black Lives Matter movement.
Germany has seen the largest increase in large protests among major European economies, Chaucer reported. The number rose from an average of 4.7 per year between 2000 and 2009 to 16.3 between 2010 and 2019, a peak of 247%. France followed, with an increase of 108%, from 7.1 to 14.8 per year.
Last year, the COVID-19 pandemic resulted in the biggest economic contraction since the Great Depression, adding stress to developing economies still recovering from GFC. Chaucer predicted that more political unrest would arise in the years to come due to the pandemic.
“These numbers clearly show an increase in political unrest in the post-financial crisis world,” said Andrew Bauckham, head of political violence and crisis management at Chaucer. “When times get tough, anger inevitably rises against governments and elites, which turns into protests and civil unrest. The increase in civil protest incidents has led some international insurers to exclude damage caused by protests and general insurance disturbances.
“This process of removing coverage was accelerated by the increase in global protests after the global financial crisis. This has created the need for a specific class of insurance that banks, retailers, leisure operators, real estate funds and other businesses can purchase to ensure they are covered for what may be. very significant losses.
Businesses and homeowners are increasingly turning to specialized SRCC insurance to supplement their standard policies, Chaucer said.
“Failure to do so could be costly,” the insurer said. “According to the Insurance Information Institute, the Black Lives Matter protests between May 26 and June 8, 2020 would have cost US insurers between $ 1 billion and $ 2 billion. “