Swiss Re’s report underscores the compounding impacts of natural catastrophes, weakening supply chain resilience, and the persistent underfunding of healthcare systems.
Natural Disasters and Cascading Effects
The report highlights the growing frequency and severity of weather-related natural catastrophes. Events like floods, wildfires, and storms not only cause direct property damage and loss of life but also trigger cascading effects that pose additional risks. Wildfires, for instance, can contaminate water sources or disrupt access, while floods and storms can damage energy grids and transport networks. These disruptions can halt production, spoil materials, and delay deliveries, leading to significant economic losses if critical infrastructure and supply chains are affected.
Supply Chain Vulnerability
Post-COVID-19, the focus on supply chain security has shifted back to immediate cost savings, increasing risks. The Red Sea crisis exemplifies how geopolitical volatility, extreme weather, economic uncertainty, and heightened cyber risks threaten global supply routes. Swiss Re stresses the need for companies to prioritise supply chain resilience to prevent significant economic fallout from compounded risks. “Supply chain resilience should be at the top of companies’ agendas,” the report advises.
Healthcare Infrastructure Under Strain
Climate change and supply chain issues also exacerbate the underfunding of healthcare systems. Essential services like water, sanitation, and electricity may be compromised under extreme climate scenarios, leading to frequent flooding and other disruptions. Weakened health services increase societal risks, with delayed or inadequate care contributing to higher morbidity and mortality rates. This, in turn, impacts economies through increased absenteeism and understaffing. The report notes that underfunding of healthcare systems is a concern across low-, middle-, and high-income countries.
Patrick Raaflaub, (pictured), Swiss Re Group Chief Risk Officer, commented on the report: “We live in a world characterised by interconnected crises, which in turn can give rise to new risks. For re/insurers, it is key to anticipate trends and understand how major global issues such as climate change, economic uncertainty or geopolitical turmoil could impact not only the industry but also society as a whole.”
The full report can be found here.
