Which risks will trouble the globe in 2023?

The cost-of-living crisis poses the biggest worldwide risk in 2023, according to findings in the World Economic Forum’s Global Risks Report 2023. 

Two years from now, experts expect the cost of living will still be the number one risk on the global agenda. A ten-year outlook, however, shows climate action failure will dominate as the biggest risk. 

The report, produced in partnership with Marsh McLennan and Zurich Insurance Group, draws on insights from more than 1,200 experts and policymakers worldwide. 

A myriad of risk categories — environmental, geopolitical, societal and technological — are expected to have the biggest impacts in the next two years. Natural disasters and extreme weather events come in second place for the biggest global risks in 2023, followed by geoeconomic confrontation in third.

Failure to mitigate climate change and erosion of social cohesion and societal polarization sit at fourth and fifth place, respectively.  

The two-year top findings reflect the P&C industry’s concern that the multitude of issues facing the industry simultaneously are creating a ‘perfect storm’ for 2023.  

At the same time, the report showed aspects of climate and environmental risks dominated six out of 10 top global risks in the next decade. 

World Economic Forum Global Risks Perception Survey 2022-2023

“The world’s collective focus is being channeled into the ‘survival’ of today’s crises: cost of living, social and political polarization, food and energy supplies, tepid growth, and geopolitical confrontation, among others,” wrote Saadia Zahidi, managing director at the World Economic Forum. 

“Yet much-needed attention and resources are being diverted from newly emerging or rapidly accelerating risks to natural ecosystems, human health, security, digital rights and economic stability that could become crises and catastrophes in the next decade.”  

While inflationary pressures like rising grocery and housing prices are expected to disproportionately hit consumers in the next couple of years, cost of living does not rank among the top-10 long-term risks. That’s an indication experts see an end to current economic volatilities. 

Nine of the 10 top risks cross over into both the short- and long-term risk outlooks, including, failure to mitigate climate change, geoeconomic confrontation and erosion of social cohesion and societal polarization.

However, two new risks have entered the top rankings, as both the short and long-term concerns: widespread cybercrime and cyber insecurity, and large-scale involuntary migration.  

Not surprisingly, as cybercrimes have become increasingly sophisticated in recent years, global respondents recognized a growing threat to their digital privacy from data fraud or theft, and cyber espionage actions.  

Large-scale involuntary migration may reflect other top risks, such as climate change, which is being touted as a key migration driver and the cause of some global conflicts. 

Feature image by iStock.com/hamzaturkkol