Skip to main content
Article

The long term implications of COVID-19 on business risk

Rådgivning om selskapsrisiko|Cyber Risk Management|Investments
Climate Risk and Resilience|COVID 19 Coronavirus

April 15, 2020

This article explores the long term impact of the COVID-19 through a number of different lenses.

As businesses around the world are grappling with the immediate impacts that COVID-19 is having on the global system and its resilience, it is important not to forget the slow burn impacts, as this is where unintended consequences can create hidden tipping points.

What’s COVID-19 going to do in the future? What might this look like beyond the event? Is it going to happen more quickly than you realize?

With many countries under ‘lock-down’ and their COVID-19 death and infection rates rising exponentially, it is understandable that society’s focus remains transfixed on how to contain and deal with the immediate impacts of this virus.

The term pandemic is often exemplified by the 1918 Spanish Flu pandemic estimated to have claimed the lives of between 20-50 million people globally2. While acknowledging the tragic suffering and loss of life, even today’s worst scenarios do not envisage the same impact of that terrible event. However, the modern-day equivalent of those losses could perhaps be translated into how people’s working, leisure and social lives are affected by the shocks to the economy globally.

The H2N2 virus of 1957 also remains clear in the minds of many, having severely challenged the health services of the time and killing over a million people around the world3. This was followed by the Hong Kong flu of 1968 and the Russian flu of 1977 which was thought to be a re-emergence of Spanish flu4. Our experiences of such globally impacting viral infections are not new and they do not appear to completely disappear. However, what is new is the way in which we can now connect across the world and the speed with which microorganisms can be spread. Should we be prepared for viral infections becoming a more regular feature of our lives and will this impact on the way in which we work, travel and communicate?

Optimistic predictions suggest that by late spring we could be over the peak of the virus but, as the numbers of those affected continue to grow, that timeframe seems to be edging further away. Some forecasts now point to late summer if not early next year.

A recent impact modeling exercise illustrates the economic, business and financial implications of the impact over several timeframes and suggests that in a worst-case scenario we could be heading for a multi-quarter and deep global recession, with entrenched structural business challenges that would take some years to recover.5 These scenarios presented do not necessarily provide any clarity to the current situation. However, they do provide a perspective on what the global economic situation may look like post-COVID-19. More importantly, they give organizations insight that can be used as they plan for the new reality that will emerge.

In this series of articles, we will explore various dimensions of what a post-COVID-19 reality may look like, and we will offer practical considerations to help leaders take a proactive approach in planning and preparing to operate in a post-crisis world.


Table of Contents


  1. 01

    What could a post-COVID-19 world look like? Part I

    Frederick Gentile and Lucy Stanbrough | April 15, 2020

    This article looks at the long term impact of COVID-19 from a people, investments and cyber perspective.


  2. 02

    What could a post-COVID-19 world look like? Part II

    Frederick Gentile and Lucy Stanbrough | April 15, 2020

    This article looks at the long term impact of COVID-19, considering business resilience, climate and geopolitics.


  3. 03

    What can organisations do in a post-COVID-19 world?

    Frederick Gentile and Lucy Stanbrough | April 15, 2020

    This article looks at a post-COVID-19 world, and what businesses can be doing in this new environment.


Each applicable policy of insurance must be reviewed to determine the extent, if any, of coverage for COVID-19. Coverage may vary depending on the jurisdiction and circumstances. For global client programs it is critical to consider all local operations and how policies may or may not include COVID-19 coverage.

The information contained herein is not intended to constitute legal or other professional advice and should not be relied upon in lieu of consultation with your own legal and/or other professional advisors. Some of the information in this publication may be compiled by third party sources we consider to be reliable, however we do not guarantee and are not responsible for the accuracy of such information. We assume no duty in contract, tort, or otherwise in connection with this publication and expressly disclaim, to the fullest extent permitted by law, any liability in connection with this publication. Willis Towers Watson offers insurance-related services through its appropriately licensed entities in each jurisdiction in which it operates.

The information given in this publication is believed to be accurate at the date of publication shown at the top of this document. This information may have subsequently changed or have been superseded, and should not be relied upon to be accurate or suitable after this date.

Footnote

1 https://www.theguardian.com/world/2020/mar/15/uk-coronavirus-crisis-to-last-until-spring-2021-and-could-see-79m-hospitalised

2 https://www.cdc.gov/flu/pandemic-resources/1918-pandemic-h1n1.html

3 https://www.cdc.gov/flu/pandemic-resources/1957-1958-pandemic.html

4 https://www.bbc.co.uk/news/magazine-21125713

5 https://www.willistowerswatson.com/en-GB/Insights/2020/02/covid-19-outbreak-implications-and-practical-considerations-for-employers

Download
Contact Us