The report highlighted the 1.5-mile-long Oxford Street in the West End district of London as a
classic example of the effects of this risk. This shopping mecca included more than 90
flagship fashion and high-tech retail stores, restaurants, and entertainment venues. Due to
the COVID-19 pandemic, the British government issued a lockdown order in March 2020 and
the West End turned into a deserted and desolate area. As the pandemic began to ease, it is
estimated that one-fifth of Oxford Street was closed for good and more than 50,000 retail
and hospitality jobs were lost. Revenues in the district fell by more than 80 percent.
Sadly, the effects were not restricted to just the retail industry. Business interruption became
one of the top risks for the hospitality, travel, and leisure industries, as well as the energy and
the life sciences sectors. The resulting economic slowdown and even slower recovery helped
to exacerbate these issues. Also, it is expected that the virus will have a long-term impact on
people and organizations around the globe.
Natural Catastrophes/Climate Change
Earthquakes. Floods. Wildfires. Temperature fluctuations.
It's not hard to read the news every day and not see a reference to disruptions caused by
natural catastrophes and climate change. In the 17th edition of The Global Risks Report 2022
(published by the World Economic Forum), "climate action failure" was listed as the number
one long-term threat to the world -- and potentially having the most severe impacts over the
next decade.
The report states that "In 2020, multiple cities around the world experienced extreme
temperatures not seen for years—such as a record high of 42.7°C in Madrid and a 72-year low
of -19°C in Dallas, and regions like the Arctic Circle have averaged summer temperatures 10°C
higher than in prior years."
"The pandemic has subverted the traditional way
we think about business interruption... It has been
redefined — businesses can be interrupted on a
much wider berth of issues. Because of
technology and the way we do business, BI
[business interruption] can be more systemic. It
doesn't just happen to those in high-risk areas. BI
can happen to anyone."
- Richard Waterer,
Managing Director, AON EMEA
THE NEW RISK MANAGEMENT | 6
