5 of the Most Demanding Global Risks to Prepare for in 2020

By: | January 6, 2020

Les Williams, CRM, is Co-Founder and Chief Revenue Officer of Risk Cooperative. He holds a B.S. in Mechanical Engineering from the University of Virginia and an MBA from Harvard Business School. Prior to joining Risk Cooperative, Les served in various institutional sales positions at SoHookd, JLL, and IBM.

According to the World Economic Forum’s (WEF) top 10 business risks of highest concerns globally released this past October, the top 10 global risks are:

  • Fiscal crises
  • Cyber attacks
  • Unemployment or underemployment
  • Energy price shock
  • Failure of national governance
  • Profound social instability
  • Data fraud or theft
  • Interstate conflict
  • Failure of critical infrastructure
  • Asset bubble

The survey was conducted by interviewing global executives in the following regions: East Asia and the Pacific, Eurasia, Europe, Latin America and the Caribbean, Middle East and North Africa, North America, South Asia, and Sub-Saharan Africa.


While each of these risks are equally important to organizations going into 2020, five of these risks are united by one common theme: Their impact on international business operations.

Fiscal crises, failure of governance, social instability, interstate conflict, and cyber attacks represent risks that entities should be most careful of when conducting business abroad. These risks are interconnected, with each having an impact on the severity and likelihood of the others.

1) Fiscal Crises

According to the International Monetary Fund, global growth remains sluggish at 3.2% in 2019, projected to rise slightly to 3.5% in 2020.

Lower growth, combined with a record increase in debt levels of the world’s seven largest economies, has increased the likelihood of fiscal crises resulting in this risk being ranked #1 in the WEF’s report.

That this risk overcame climate change or the threat of pandemic risks as the #1 perceived risk among survey respondents suggests there are some severe perils hiding in organizational blind spots — or that a certain “disaster fatigue” may have set in along with the sense that little can be done to alter the course of these types of events.

2) Social Instability

In response to lower growth and rising debt, governments typically respond with higher taxes and spending cuts to shore up weakened balance sheets.

These measures tend to impact members of society clinging to the lowest rungs of the socioeconomic ladder. This population is more sensitive to cuts in public services and, many times, are especially dependent on certain industries impacted by a weakening labor market.

Examples of social instability do not live solely in emerging market economies; we need look no further than the recent anti-government protests in France led by the gilets jaunes or “yellow vests.” Rising fuel taxes and stagnant wages in a high cost-of-living environment are some of the grievances expressed by the protesters. Many of these protesters are middle-class citizens, making the situation even more caustic.

3) Failure of National Governance

The growing threat of financial crises puts an increasing strain on a government’s ability to provide services for its citizens, creating social instability, which in turn causes citizens to lose faith in their respective governments.

Lack of transparency among public officials (corruption), lackluster delivery of social services, income inequality and rampant crime are all factors contributing to this “no-confidence vote” amongst the populace in certain regions around the world.

Primavera Latinoamericana, or Latin American Spring, has given rise to riots by citizens of Colombia, Chile, Ecuador and Bolivia, among others. This trend is expected to continue well into 2020.

4) Interstate Conflict

Interstate conflict is possibly the most insidious risk facing entities and their international operations.

We need look no further than the recent developments between Iran and the U.S.

Shortly after the New Year, U.S. President Donald J. Trump ordered a lethal missile strike on a convoy of vehicles carrying General Qassem Soleimani, an influential Iranian military leader, in Iraq’s Capital. While international reaction has varied, this incident may mark the beginning of not only a military campaign between the two nations, but also an advanced cyber warfare campaign given the history of past skirmishes.

Evidence of this has already begun, with a group of hackers claiming to be from Iran breaching the website of the U.S. Federal Deposit Library Program.

5) Cyber Warfare

A new risk that must be accounted for involving cyber is the act of war exclusion found on many property and other insurance policies.

Merck Pharmaceuticals and food giant Mondelez were a few of the hundreds of global companies directly affected by the 2017 Russian-born NotPetya cyber attack. According to The Insurance Journal, Merck’s direct and indirect losses totaled $1.3 billion, and over 30 insurers and reinsurers denied coverage due to Merck’s property policies specifically excluding acts of war (even though Merck was not a willing combatant in the attack, rather an innocent bystander).

While Merck took many of these insurers to court, such as AIG and Allianz, the fallout from the breach continued as the pharmaceutical giant struggled to reopen several production facilities that were shuttered.

This will not be the first time businesses and universities will be exposed to this opaque exclusion, and we can expect this conundrum to arise again as Iran and other actors are expected to launch more cyber attacks on the U.S. and other targets, which may hone in on “easier prey” or soft targets.

Managing the Risks by Managing Policies

While the aforementioned risks are enough to make any entity think twice before planning travel or conducting business globally during 2020, it is wise to review certain insurance and enterprise risk management policies.

Event cancellation coverage is very comprehensive, covering perils such as the death of a foreign leader, threat of communicable disease, threat of natural disaster, act of war, act of civil war, political intimidation, strikes and civil commotion, riots, terrorism and more. The ability to pivot or cancel an international trip due to these unforeseen perils is something event cancellation coverage provides.

Political risk insurance is especially important in 2020 given the current geopolitical environment. This insurance covers perils like government confiscation of property, civil commotion, currency inconvertibility, terrorism, war and import/export embargos, among others.


The actual exercise of reviewing a current cyber policy or procuring new coverage allows an organization to remain current with the most recent threats in this fast-moving risk landscape. There are several key coverages every comprehensive cyber policy must contain, such as security breach response, extortion, business income interruption and reputational harm.

The act of war exclusion must also be specifically addressed in policies, or organizations must be made aware that their potential economic costs due to a war risks exclusion will go unhedged by insurance.

Equally as troubling is the situation known as “silent cyber,” the unknown exposure in an insurance portfolio created by a cyber risk that has neither been excluded nor included, therefore creating a scenario where insureds are tacitly at risk.

Organizations must consult their risk managers/insurance brokers to ensure that their policies specifically address acts of war relating to cyber and are not silent regarding cyber threats.

Event cancellation, political risk and cyber insurance are coverage classes that simply place a fixed price on the uncertainty following an unfortunate event. These coverages, in concert with proper planning, will help make organizations more resilient on the global stage in an uncertain 2020. &

More from Risk & Insurance

More from Risk & Insurance

Risk Scenario

The Betrayal of Elizabeth

In this Risk Scenario, Risk & Insurance explores what might happen in the event a telemedicine or similar home health visit violates a patient's privacy. What consequences await when a young girl's tele visit goes viral?
By: | October 12, 2020
Risk Scenarios are created by Risk & Insurance editors along with leading industry partners. The hypothetical, yet realistic stories, showcase emerging risks that can result in significant losses if not properly addressed.

Disclaimer: The events depicted in this scenario are fictitious. Any similarity to any corporation or person, living or dead, is merely coincidental.


Elizabeth Cunningham seemingly had it all. The daughter of two well-established professionals — her father was a personal injury attorney, her mother, also an attorney, had her own estate planning practice — she grew up in a house in Maryland horse country with lots of love and the financial security that can iron out at least some of life’s problems.

Tall, good-looking and talented, Elizabeth was moving through her junior year at the University of Pennsylvania in seemingly good order; check that, very good order, by all appearances.

Her pre-med grades were outstanding. Despite the heavy load of her course work, she’d even managed to place in the Penn Relays in the mile, in the spring of her sophomore season, in May of 2019.

But the winter of 2019/2020 brought challenges, challenges that festered below the surface, known only to her and a couple of close friends.

First came betrayal at the hands of her boyfriend, Tom, right around Thanksgiving. She saw a message pop up on his phone from Rebecca, a young woman she thought was their friend. As it turned out, Rebecca and Tom had been intimate together, and both seemed game to do it again.

Reeling, her holiday mood shattered and her relationship with Tom fractured, Elizabeth was beset by deep feelings of anxiety. As the winter gray became more dense and forbidding, the anxiety grew.

Fed up, she broke up with Tom just after Christmas. What looked like a promising start to 2020 now didn’t feel as joyous.

Right around the end of the year, she plucked a copy of her father’s New York Times from the table in his study. A budding physician, her eyes were drawn to a piece about an outbreak of a highly contagious virus in Wuhan, China.

“Sounds dreadful,” she said to herself.

Within three months, anxiety gnawed at Elizabeth daily as she sat cloistered in her family’s house in Bel Air, Maryland.

It didn’t help matters that her brother, Billy, a high school senior and a constant thorn in her side, was cloistered with her.

She felt like she was suffocating.

One night in early May, feeling shutdown and unable to bring herself to tell her parents about her true condition, Elizabeth reached out to her family physician for help.

Dr. Johnson had been Elizabeth’s doctor for a number of years and, being from a small town, Elizabeth had grown up and gone to school with Dr. Johnson’s son Evan. In fact, back in high school, Evan had asked Elizabeth out once. Not interested, Elizabeth had declined Evan’s advances and did not give this a second thought.

Dr. Johnson’s practice had recently been acquired by a Virginia-based hospital system, Medwell, so when Elizabeth called the office, she was first patched through to Medwell’s receptionist/scheduling service. Within 30 minutes, an online Telehealth consult had been arranged for her to speak directly with Dr. Johnson.

Due to the pandemic, Dr. Johnson called from the office in her home. The doctor was kind. She was practiced.

“So can you tell me what’s going on?” she said.

Elizabeth took a deep breath. She tried to fight what was happening. But she could not. Tears started streaming down her face.

“It’s just… It’s just…” she managed to stammer.

The doctor waited patiently. “It’s okay,” she said. “Just take your time.”

Elizabeth took a deep breath. “It’s like I can’t manage my own mind anymore. It’s nonstop. It won’t turn off…”

More tears streamed down her face.

Patiently, with compassion, the doctor walked Elizabeth through what she might be experiencing. The doctor recommended a follow-up with Medwell’s psychology department.

“Okay,” Elizabeth said, some semblance of relief passing through her.

Unbeknownst to Dr. Johnson, her office door had not been completely closed. During the telehealth call, Evan stopped by his mother’s office to ask her a question. Before knocking he overheard Elizabeth talking and decided to listen in.


As Elizabeth was finding the courage to open up to Dr. Johnson about her psychological condition, Evan was recording her with his smartphone through a crack in the doorway.

Spurred by who knows what — his attraction to her, his irritation at being rejected, the idleness of the COVID quarantine — it really didn’t matter. Evan posted his recording of Elizabeth to his Instagram feed.

#CantManageMyMind, #CrazyGirl, #HelpMeDoctorImBeautiful is just some of what followed.

Elizabeth and Evan were both well-liked and very well connected on social media. The posts, shares and reactions that followed Evan’s digital betrayal numbered in the hundreds. Each one of them a knife into the already troubled soul of Elizabeth Cunningham.

By noon of the following day, her well-connected father unleashed the dogs of war.

Rand Davis, the risk manager for the Medwell Health System, a 15-hospital health care company based in Alexandria, Virginia was just finishing lunch when he got a call from the company’s general counsel, Emily Vittorio.

“Yes?” Rand said. He and Emily were accustomed to being quick and blunt with each other. They didn’t have time for much else.

“I just picked up a notice of intent to sue from a personal injury attorney in Bel Air, Maryland. It seems his daughter was in a teleconference with one of our docs. She was experiencing anxiety, the daughter that is. The doctor’s son recorded the call and posted it to social media.”

“Great. Thanks, kid,” Rand said.

“His attorneys want to initiate a discovery dialogue on Monday,” Emily said.

It was Thursday. Rand’s dreams of slipping onto his fishing boat over the weekend evaporated, just like that. He closed his eyes and tilted his face up to the heavens.

Wasn’t it enough that he and the other members of the C-suite fought tooth and nail to keep thousands of people safe and treat them during the COVID-crisis?

He’d watched the explosion in the use of telemedicine with a mixture of awe and alarm. On the one hand, they were saving lives. On the other hand, they were opening themselves to exposures under the Health Insurance Portability and Accountability Act. He just knew it.

He and his colleagues tried to do the right thing. But what they were doing, overwhelmed as they were, was simply not enough.


Within the space of two weeks, the torture suffered by Elizabeth Cunningham grew into a class action against Medwell.

In addition to the violation of her privacy, the investigation by Mr. Cunningham’s attorneys revealed the following:

Medwell’s telemedicine component, as needed and well-intended as it was, lacked a viable informed consent protocol.

The consultation with Elizabeth, and as it turned out, hundreds of additional patients in Maryland, Pennsylvania and West Virginia, violated telemedicine regulations in all three states.

Numerous practitioners in the system took part in teleconferences with patients in states in which they were not credentialed to provide that service.

Even if Evan hadn’t cracked open Dr. Johnson’s door and surreptitiously recorded her conversation with Elizabeth, the Medwell telehealth system was found to be insecure — yet another violation of HIPAA.

The amount sought in the class action was $100 million. In an era of social inflation, with jury awards that were once unthinkable becoming commonplace, Medwell was standing squarely in the crosshairs of a liability jury decision that was going to devour entire towers of its insurance program.

Adding another layer of certain pain to the equation was that the case would be heard in Baltimore, a jurisdiction where plaintiffs’ attorneys tended to dance out of courtrooms with millions in their pockets.

That fall, Rand sat with his broker on a call with a specialty insurer, talking about renewals of the group’s general liability, cyber and professional liability programs.

“Yeah, we were kind of hoping to keep the increases on all three at less than 25%,” the broker said breezily.

There was a long silence from the underwriters at the other end of the phone.

“To be honest, we’re borderline about being able to offer you any cover at all,” one of the lead underwriters said.

Rand just sat silently and waited for another shoe to drop.

“Well, what can you do?” the broker said, with hope draining from his voice.

The conversation that followed would propel Rand and his broker on the difficult, next to impossible path of trying to find coverage, with general liability underwriters in full retreat, professional liability underwriters looking for double digit increases and cyber underwriters asking very pointed questions about the health system’s risk management.

Elizabeth, a strong young woman with a good support network, would eventually recover from the damage done to her.

Medwell’s relationships with the insurance markets looked like it almost never would. &


Risk & Insurance® partnered with Allied World to produce this scenario. Below are Allied World’s recommendations on how to prevent the losses presented in the scenario. This perspective is not an editorial opinion of Risk & Insurance.®.

The use of telehealth has exponentially accelerated with the advent of COVID-19. Few health care providers were prepared for this shift. Health care organizations should confirm that Telehealth coverage is included in their Medical Professional, General Liability and Cyber policies, and to what extent. Concerns around Telehealth focus on HIPAA compliance and the internal policies in place to meet the federal and state standards and best practices for privacy and quality care. As states open businesses and the crisis abates, will pre-COVID-19 telehealth policies and regulations once again be enforced?

Risk Management Considerations:

The same ethical and standard of care issues around caring for patients face-to-face in an office apply in telehealth settings:

  • maintain a strong patient-physician relationship;
  • protect patient privacy; and
  • seek the best possible outcome.

Telehealth can create challenges around “informed consent.” It is critical to inform patients of the potential benefits and risks of telehealth (including privacy and security), ensure the use of HIPAA compliant platforms and make sure there is a good level of understanding of the scope of telehealth. Providers must be aware of the regulatory and licensure requirements in the state where the patient is located, as well as those of the state in which they are licensed.

A professional and private environment should be maintained for patient privacy and confidentiality. Best practices must be in place and followed. Medical professionals who engage in telehealth should be fully trained in operating the technology. Patients must also be instructed in its use and provided instructions on what to do if there are technical difficulties.

This case study is for illustrative purposes only and is not intended to be a summary of, and does not in any way vary, the actual coverage available to a policyholder under any insurance policy. Actual coverage for specific claims will be determined by the actual policy language and will be based on the specific facts and circumstances of the claim. Consult your insurance advisors or legal counsel for guidance on your organization’s policies and coverage matters and other issues specific to your organization.

This information is provided as a general overview for agents and brokers. Coverage will be underwritten by an insurance subsidiary of Allied World Assurance Company Holdings, Ltd, a Fairfax company (“Allied World”). Such subsidiaries currently carry an A.M. Best rating of “A” (Excellent), a Moody’s rating of “A3” (Good) and a Standard & Poor’s rating of “A-” (Strong), as applicable. Coverage is offered only through licensed agents and brokers. Actual coverage may vary and is subject to policy language as issued. Coverage may not be available in all jurisdictions. Risk management services are provided or arranged through AWAC Services Company, a member company of Allied World. © 2020 Allied World Assurance Company Holdings, Ltd. All rights reserved.

Dan Reynolds is editor-in-chief of Risk & Insurance. He can be reached at [email protected]