Before the start of this year, people were already referring to the 2024 electoral calendar as "Democracy's Super Bowl", in anticipation of nearly half of the world's population going to the polls.
With more than 1.2 billion people expected to vote in a record number of elections across Africa, Asia, the Americas, Europe and Oceania, the stage is set for significant geopolitical change.1
In a recent episode of the Spotlight podcast, Jake Hernandez, chief executive officer of Gallagher consultancy AnotherDay, addressed the implications for businesses of a likely increase in state-sponsored cyber attacks, an explosion of disinformation via social media channels, and increasing social unrest and acts of political violence.
Spillover cyber risks
Cyber threats have risen to the top of the corporate risk agenda with an increase in ransomware attacks. Against a backdrop of growing geopolitical tensions, there's an expectation of more frequent and severe cyber attacks, including state-sponsored attempts to disrupt elections this year.
Incidents such as the ransomware attack on laboratory services provider Synnovis in June 2024 highlight the importance of having a robust and tested event response plan for system outages and data breaches.
The third-party software glitch in July that disrupted services for multiple businesses around the world, while not the result of a cyber attack, is a reminder of the interconnected nature of digital supply chains.
Major cyber incidents impacted 120 countries in 2023, with more than 40% of attacks aimed at government and private-sector organizations involved in critical infrastructure such as power grids, transport networks and healthcare systems.2
Other businesses could be impacted by the spillover from these infrastructure attacks, and firms are also exposed to the risk of malware targeting software supply chains.
Contingency plans should address employees' cyber risk awareness, consider cybersecurity protocols such as zero trust and network segmentation or virtualization, and stress test insurance coverage to assess how policies will respond to cyber events.
Disinformation
With many electoral contests this year focused on foreign policy issues, every election is a roll of the dice in geopolitical terms. So-called "wedge issues," such as the Russia-Ukraine war and the Israel-Hamas conflict, are also causing increased social polarization in the runup to elections.
Meanwhile, machine learning algorithms driving content recommendations on social media platforms have led to the creation of echo chambers, where the entrenched views of social media users are reinforced rather than challenged. This lack of a broader perspective makes individuals more susceptible to misinformation.
At the same time, the malicious distribution of disinformation is eroding trust in public institutions and further increasing social polarization.
Artificial intelligence (AI) creates opportunities for this disinformation to be personalized and then distributed to individuals on a grand scale, reaching millions of potential voters at a very low cost.
So-called fake news creates more uncertainty for businesses, impacting operational and investment decisions, while the polarizing effect of social media presents a challenge to managing internal and external communications about political issues and avoiding potential damage to brand reputation.
Political violence
AI is also making it easier for malicious actors to create convincing content that can be used in targeted disinformation campaigns to fuel anger, discontent and social unrest.
Social media has also enabled the phenomenon of "leaderless rebellions," such as the anti-tax protests in the Kenyan capital Nairobi, where the rallying power of platforms coupled with the ability to generate outrage through shared tweets, hashtags, images and videos can kickstart and then drive social unrest.
More recently, the role of disinformation can be seen in disorder that swept across UK cities in August, causing casualties along with significant property damage and business interruption (BI).3
In addition to direct risk to business assets and employees, social unrest can bring about disruption to supply chains and business operations. This disruption includes the possibility of non-damage BI losses from curfews, exclusion zones or internet shutdowns.
Among larger companies, there's a growing demand for intelligence about geopolitical tensions to inform risk and crisis management planning and enable organizations to diversify their operations across multiple jurisdictions to reduce aggregation risk.
Improved intelligence can also inform appetite for standalone terrorism and political violence cover for specific territories. This is important because global property policies increasingly exclude coverage for strikes, riots and civil commotion.
The world is changing rapidly, and this year's electoral cycle is likely to throw up a series of social and political issues whose impact will be felt well into 2025.
Scenario planning, robust cybersecurity, and crisis and continuity management are key to navigating the uncertain and polarizing environment that will likely follow in the wake of Democracy's Super Bowl.
Published September 2024
