Sarah Taylor, head of political risk and structured credit at Aon, added, “Businesses operating in territories where political risk is elevated should be considering insurance that covers against government decisions that can lead to contract cancellation, when measures are introduced to create barriers to trade, and against government action that curtails business operations and/or investments.”

Henry Wilkinson, head of intelligence and analysis at the Risk Advisory Group, said, “Reactionary populism in the political mainstream in several countries has given extremist fringes a sense of opportunity upon which to mobilize violent protests and intimidation around divisive political themes. Far right terrorism remains a largely disorganized but growing threat. Businesses in Europe cannot be complacent about violent risks in traditionally stable markets. A comprehensive capability to monitor, assess, and manage violent risks is as essential as a violent risk transfer strategy.”

Key findings included:

Terrorism

• Terrorists are increasingly targeting public spaces and concentrations of people, exposing firms to potentially significant exposures.
• Germany experienced a spike in far-right attacks and plots – with 23 incidents between 2016-2018, doubling previous numbers – but it is apparent that far-right terrorism and activism is on the rise throughout Europe.
• Returning Islamic State fighters will present significant challenges to security services, businesses, and communities across Europe.
• Islamic State attacks in Europe and North America fell by half between 2017 and 2018, but rather than decline globally, the group has redirected its efforts elsewhere.
• 16 percent of terrorist attacks in 2018 targeted or directly impacted business.

• Populism is no longer a fringe issue in Europe. Eleven countries in Europe now have populist parties in government, while populist parties hold on average 22 percent of vote share across 33 European countries.
• Where populist policies lead to greater barriers to trade, this has increased the prospect of politically-motivated moves to frustrate established contracts, while forcing firms to consider their international supply chains as tariffs and trade barriers rise.
• Anti-immigrant sentiment is one of the central tenets of many populist movements. This is likely to fuel further far-right terrorism and social tension.
• Risks are also apparent for European firms operating globally, with regions such as sub-Saharan Africa and Latin America particularly exposed to government interventions that can impact firms' ability to investment and trade internationally.