The global infrastructure sector saw economic losses equivalent to at least £119bn in 2023 – with the majority of losses sustained in Ukraine, which saw over 27,000km of road damaged.
This is amongst the findings of the Adapt Ready annual Event & Disaster report. The risk intelligence platform provider’s latest report shows the impact of increased global connectivity, and warns insurers and risk managers to be prepared for this ‘new normal’.
The report reveals that the automotive, construction, energy and chemical sectors were hit hardest in 2023, but none more so than the infrastructure sector.
The risks presented by increasing global interconnectivity are laid bare in the report, in particular the production of rare metal palladium and semiconductor-grade nickel, both of which are essential to the global electronics and automotive industries.
Russia is the world’s largest producer of palladium and the second largest of semiconductor-grade nickel. The disruption in the supply of these two metals had already impacted the production of General Motors, Toyota and Volkswagen, and this continued in 2023. Apple, Samsung and Sony have also been impacted.
The five disaster events all impacted local energy industries to some extent, the report details. The Turkey and Syria earthquake significantly impacted the region’s energy industry. The 7.8M quake destroyed two sections of gas transmission lines, whilst other infrastructure damage caused the shutdown of the Ceyham oil terminal in southern Turkey, which in turn affected crude oil exports from Iraq and Azerbaijan.
Commenting on the findings, Adapt Ready CEO and co-founder Shruthi Rao said: “Our report clearly shows that greater global connectivity is leading to further reaching and more complex supply chains. In turn, this is leading to increased complexity when it comes to understanding and managing the potential risks they are exposed to. In an era of heightened geopolitical uncertainty and evolving natural catastrophe risk due to climate change, insurers, brokers and corporate risk managers are facing a challenge to oversee and navigate this.”
