General Insurance Article - Societal Risks in a Post Covid19 Era

John Scott, Head of Sustainability Risk at Zurich Insurance comments in the WEF & Zurich Insurance Covid-19 Risk report: “Increasing inequality, dramatically shifting consumer behaviors and a lockdown that is having a significant toll on young people’s prospects, mental health and wellbeing are highly interdependent issues which impact the global economy, geopolitics and our societies in equal measure.

 On top of this, we are already seeing record levels of unemployment due to lockdown measures and are having to re-learn hard lessons - in particular that social deprivation determines health outcomes.”

 • HR departments have rarely been more important. Working remotely increases the risk of isolation, alcohol dependency, excess smoking and bad backs through poor ergonomic posture.
 • The state was previously seen as the ultimate safety net but employers have had to accept that they too have to protect their workers in order to survive and thrive.
 • Getting back to a pre-Covid-19 growth phase is likely to be a long and difficult task and businesses will likely use fewer employees in the future. The challenge to return to normal is, therefore, as much a psychological as economic choice.

 • This economic crisis has already hit those in more socially disadvantaged groups disproportionately harder.
 • Some are having to face the moral dilemma of choosing between working to generate income or staying at home to protect their family’s health.
 • Therefore, continued exposure to health risks faced by essential workers, who are often among the lowest paid, raises the concern of heightened death rates amongst people in these roles – highlighting significant societal, income and health inequalities.

 Future generations
 • The mental health and wellbeing of young people is suffering – as are their long-term prospects
 • Youth employment in developed economies had only just returned to pre-2008 financial crisis levels. And in developing economies, youth unemployment has risen steadily, creating a real risk of social unrest.
 • Currently 80% of the world’s students - more than 1.6 billion young people - are not attending school and many students in poorer communities lack the necessary tools to access online courses or are unable to easily work at home.

 Consumer behaviour
 • Consumer behaviours are already changing, even during the stabilisation phase, which most economies are in right now. In March, global consumer spending was lower with every passing week.
 • In the last two weeks of April and early May, however, consumer spending recovered a little each week in anticipation of a move into a ‘normalisation’ phase - where economies reduce lockdown measures and show signs of economic recovery.
 • At first, expenditure was on basics, such as groceries, but now spending is more focused on home improvements and clothing. There is not yet any significant expenditure on entertainment.

 John Scott concludes: “The long-term societal impacts, such as an exacerbation of inequality and changes in consumer behaviours, the nature of work and the role of technology - both at work and at home - will change our way of life forever, for us as individuals, as a workforce, a society and future generations. These social dimensions of the crisis, including generational frictions and continued stress on people’s well-being, will be felt by people worldwide and create substantial societal consequences for the long term.”

 “We do have cause for optimism. We need to focus not only on a healthcare solution, but a recovery that is focused on climate, sustainability, and on societal risks, such as inequality, mental health, the lack of societal cohesion and inclusion. If we do not do this, then the gaps in inequality - especially financial - are likely to remain and increase.”

 To read the full report follow this link: WEF COVID-19 Risks Outlook report.

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