12 February 2017
Dubai, United Arab Emirates – Marsh & McLennan Companies Inc. (NYSE: MMC), a global professional services firm offering clients advice and solutions in risk, strategy and people, is a strategic partner of the newly published 2017 Global Risks Report, an annual publication released by the World Economic Forum at Davos. This year’s 2017 Global Risks Report reveals that economic inequality, societal polarisation and intensifying environmental dangers are the top three global trends that will shape developments over the next 10 years.
In the 2017 survey, some 750 experts assessed 30 global risks, as well as 13 underlying trends that could either amplify or alter the relationships between them. Against a backdrop of mounting political disaffection and disruption across the world, three risk areas stand out for Middle East and North Africa (MENA) countries in particular: technology, financial, geopolitical and health.
Richard Smith-Bingham, Director of Global Risk Center at Marsh & McLennan Companies, commented: “Focusing on MENA in the 2017 Global Risks Report, it is clear that rapid technological change, sudden political shifts in economic relations and expectations for healthcare leading to increased medical insurance costs, may affect the region’s ongoing path to prosperity and thereby the appetite for foreign investment. We hope that the report will contribute to a debate about pragmatic solutions to these challenging risks.”
Technology Risk – cyber threats and Artificial Intelligence
Rapid advances in the technology sector including artificial intelligence and robotics are considered by the report to have the greatest potential benefits. However, rapid advances in emerging technologies also come with rising risks for the MENA region, as increasing cyber dependency and greater interconnectivity brings vulnerability and the need for better governance. While overly stringent governance may be viewed as a barrier to progress, a lack of governance may well give rise to undesirable outcomes. The report pays particular attention to the risks associated with emerging Artificial Intelligence (AI) capabilities and applications, such as autonomous vehicles and robotic pharmacies, and the complications of transferring decision-making powers from humans to AI programmes. In line with the developments in the technological and digital communications, companies in MENA region face new cyber threats on a daily basis. An ever-evolving environment of threats, litigation and regulation has both broadened the spectrum of risk and deepened the prospective uncertainty that companies face in their daily operations. The potential for these risks to cause economic loss is significant – interrupting business continuity, data protection and the region’s economy, and even disrupting regional labour market demands through automation.
Financial and Geopolitical Risk – growing global uncertainty
Over the next 10 years, MENA will also face a new and challenging climate for trade, foreign investment, and overseas assets. This is due to a new global political paradigm, which has the potential to undermine long-term social, political and economic stability, while also increasing the risk of geopolitical conflict, and inhibiting international trade and movement. As the international geopolitical landscape becomes increasingly uncertain, the real threats include a series of growing risks including state collapse or crisis, failure of national governments, interstate conflict with regional consequences, and reduced government commitment to global cooperation. The key challenges the region now faces include balancing economic growth imperatives with popular preferences and regenerating systems of global cooperation.
Health – rising disease incidence and increasing medical insurance
The rise in chronic diseases is a major risk for the MENA region. At a time when many companies are facing fiscal challenges, the heightened incidence of diabetes, heart diseases and strokes has led to rising costs for long-term treatment. As a result of this, medical insurance is now one of the highest employee spends for companies in the UAE, with forecasts suggesting that employers may struggle to balance employee expectations with these increasing costs.
Smith-Bingham added: “2016 saw a profound shift in the way we view global risks and 2017 will present a pivotal moment for the global community, requiring responsive and responsible leadership. In a time of heightened global anxiety, companies of all sizes need to re-examine their strategic, financial and operational resilience.”
The Global Risks Report 2017 was developed with the support of Strategic Partners Marsh & McLennan Companies and Zurich Insurance Group. The report also benefited from the collaboration of its academic advisers: the Oxford Martin School (University of Oxford), the National University of Singapore, the Wharton Risk Management and Decision Processes Center (University of Pennsylvania), and the Advisory Board of the Global Risks Report 2017.
Marsh is a global leader in insurance broking and risk management. Marsh helps clients succeed by defining, designing, and delivering innovative industry-specific solutions that help them effectively manage risk. Marsh’s approximately 30,000 colleagues work together to serve clients in more than 130 countries. Marsh is a wholly owned subsidiary of Marsh & McLennan Companies (NYSE: MMC), a global professional services firm offering clients advice and solutions in the areas of risk, strategy, and people. With annual revenue of US$13 billion and approximately 60,000 colleagues worldwide, Marsh & McLennan Companies is also the parent company of Guy Carpenter, a leader in providing risk and reinsurance intermediary services; Mercer, a leader in talent, health, retirement, and investment consulting; and Oliver Wyman, a leader in management consulting. Follow Marsh on Twitter, @MarshGlobal; LinkedIn; Facebook; and YouTube.
© Press Release 2017
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