Civil Unrest Leads Aon to Downgrade 37 Countries on Political Risk Map

April 25, 2012

Aon Risk Solutions, the global risk management business of Aon plc, has just issued its latest political risk map, which gauges the level of risk for international business in more than 200 countries. Aon said “37 countries were downgraded in the Aon 2012 Terrorism & Political Violence Map, largely due to civil unrest.”

The principle reason for the downgrades is linked to the “continued effects of the global economic crisis,” Aon said, “as austerity measures and spending cuts took hold, civil unrest, riots, strikes and student protests were witnessed across large parts of Europe.”

As a result 43 percent of the downgrades in Aon’s 2012 map were due to economic conditions. They included the UK, France, Germany, Italy, Portugal and Spain, which were all “downgraded from low risk to medium risk.”

The political upheaval across the Arab world “continued to cause aftershocks in that region and beyond,” Aon said. “Authoritarian governments in Africa and Asia took measures to protect themselves from similar challenges as civil unrest, property damage and localized protests continued in the Middle East and North Africa.”

However, terrorism hasn’t disappeared as a major concern; it ranks just below the economic crisis in terms of threats to “the security of businesses, with 46 percent of all countries assessed possessing the risk of terrorist incident icon.”

Aon explained that the “death of Osama bin Laden last year signified the decline of a truly globalized radical Islamist terrorism capability, but regionally active groups continue to be inspired by al-Qaida’s ideology. While South Asia and the Middle East remain as focal points for Islamist terrorist groups, Africa has shown the most dramatic shift in terrorism threat in the last year. The ratings of six African countries have been downgraded with Senegal receiving a double downgrade from low to high risk.”

The map is produced by Aon in collaboration with global risk consultancy The Risk Advisory Group. It “reflects data recorded by: Terrorism Tracker, which monitors global indicators of terrorism threat, including attacks, plots, communiqués and government countermeasures; Aon WorldAware, which provides country risk information for business travelers; and an expert assessment of the security situation in more than 200 countries.”

Aon explained that each country is “assigned a threat level, starting at negligible, and rising through low, medium, high and severe. The map acts as a gauge for the intensity of the threat of political violence to international business in each country and three icons indicate the forms of political violence:
• Terrorism and sabotage
• Strikes, riots, civil commotion and malicious damage to property
• Political insurrection, revolution, rebellion, mutiny, coup d’état, war and civil war

Neil Henderson, head of terrorism in Aon Risk Solutions’ Crisis Management Practice, commented: “As can be seen from the number of downgrades, risks continue to grow. Companies that operate internationally have to keep up to date with potential risks around the world to enable them to protect their employees, physical assets and ultimately, their bottom line.

“Businesses need to identify the threats they face and implement a comprehensive risk management program to protect themselves. As the insurance market for political violence is very mature and can cope with complex international risks, it should be considered as part of a business’ sound risk management program.”

Dr. David Claridge, managing director of Risk Advisory, added: “Once again the map highlights the challenges businesses face in ensuring the security and continuity of their global operations.

“For the first time since the map’s inception, we have recorded significant negative ratings in Western Europe that reflect civil disorder in economies traditionally seen as stable. With further austerity measures still to be imposed and the euro zone crisis only in remission, economic and social degradation are likely to be important drivers of future unrest.

“The Arab Spring features heavily in our assessments, both for its contribution to civil unrest, and also as post-uprising states fail to guarantee local and regional security. Weapons proliferation and unchecked growth of radical groups in Libya, Yemen and the Sinai Peninsula are of particular concern.”

A replay of the conference call introducing map findings can be accessed by dialing +1.203.280.0229. Access to Aon’s 2012 Terrorism & Political Violence Map can be requested via http://www.aon.com/terrorismmap

Source: Aon Risk Solutions

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