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Law360, London (October 1, 2020, 1:42 PM BST) -- The COVID-19 pandemic has overtaken climate change as the biggest risk factor for insurers this year, according to a report by AXA on emerging risks published on Thursday.
Pandemic and infectious diseases have surged to the top of the rankings in the insurer's Future Risks Report this year, which measures the perception of threats among risk managers and the wider population. Risks associated with climate change have fallen from the number one position in 2019 to the number two spot.
Climate change was the number one risk for years — although pandemic-related risks still ranked only at eighth place in the 2019 report.
The 2020 edition of the report is marked by the context of the COVID-19 pandemic and highlights health as a major area of concern, Thomas Buberl, AXA chief executive, said.
"However, this must not affect the fight against climate change, which remains the most significant and pressing challenge of our time," Buberl said.
People surveyed by AXA around the world ranked pandemics and infectious diseases as the top risk this year, although in Europe respondents still consider climate change to be the greatest emerging risk to society. But the perils of a changing climate falls to third place in Asia and America, according to the French insurer.
The third-ranked risk for this year is cybersecurity, which has risen in importance with the widespread use of technology and increase in cyberattacks during lockdown.
"The risk of shutdown of essential services and critical infrastructure following a cyberattack has also increased," AXA said.
COVID-19 had shaken economies across the globe and left insurers facing huge bills. Munich Re said in July that it has taken a €700 million ($822 million) hit as a result of the virus outbreak in the second quarter of 2020.
And, in May, Lloyd's of London said its members will pay out up to $4.3 billion in insurance claims resulting from COVID-19.
--Additional reporting by Martin Croucher. Editing by Ed Harris.
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