Global corporate risk interconnection study

A joint study by the Swiss Re Institute and the London School of Economics (LSE) indicates a 24 percent increase in the interconnection of global corporate risks since 2019. Based on an analysis of 91 Fortune 100 companies, the research identifies artificial intelligence (AI) and supply chain dependencies as primary drivers that allow technological, geopolitical, and climate-related disruptions to cascade across various sectors.

Risk reporting regarding AI and new technologies has risen by approximately 30 percent, with these concerns expanding from the IT sector into industries such as retail, pharmaceuticals, aviation, and food production. Additionally, mentions of climate risks have increased by about 31 percent since 2019. The study notes the vulnerability of physical infrastructure, citing that a significant portion of US data centers are located in areas prone to tornadoes or large hail events.

Jérôme Haegeli, chief economist of the Swiss Re Group, warned that these interconnected risks reduce the margin for error, particularly as advanced economies face high debt and limited political reserves. The findings suggest that future systemic crises may be determined by the location and reach of a shock rather than its initial size.

Recent data highlights a growing gap between risk identification and mitigation, particularly in Europe. A survey by Marsh of 146 European organizations revealed a disconnect between risk management and business strategy. While AI and analytics are priorities, 39 percent of respondents do not currently use these tools in risk management, and 32 percent use them only in limited areas. Furthermore, supply chain visibility remains a challenge, as nearly 40 percent of surveyed firms have full visibility only of their direct suppliers. While many companies utilize scenario analysis, only about one-third use those findings to adjust business decisions or confirm risk limits.