New risks arise as the world community faces well-known challenges such as the pandemic, the war in Ukraine, economic instability and a drop in trust in established social institutions, according to the Swiss Re SONAR report on the company’s 10th anniversary.
“We live in a world where billionaires can make day trips into the stratosphere, cryptoassets defy established financial norms, and climate change is changing the very nature of our physical environment,” emphasizes a press release published on the website of the international reinsurer.
A global pandemic, geopolitical conflicts, rising inflation and an ongoing climate crisis are just a few of the many risks that SONAR has explored over the past decade and that eventually materialized, according to Swiss Re Risk Group Director Patrick Raaflaub. However, the study of new risks is not forecasting. This is about raising awareness of the risks that may affect society, and about the appropriate preparation, the report says.
At the same time, it is noted that crypto assets and quantum computing create new risks in the global financial system.
In the current financial system, heavily dependent on technology, cryptocurrencies such as bitcoin and ether have established themselves as potential competitors to traditional currencies. Along with these new forms of currency, other crypto assets have emerged. Tokens, for example, allow people to buy digital images of real assets, such as art or real estate. They can be sold and give their owner access to assets, products or services. Changing ownership, taxation, regulatory issues and other risks associated with new asset classes pose new questions for insurers. For example, are certain crypto assets subject to existing ownership or cyber security policies?
The security of the new digital financial economy also faces new risks. In particular, thanks to quantum computing, a new generation of computers is on the verge of performing tasks that are inaccessible to modern machines. These ultra-intelligent technologies offer significant benefits: sophisticated weather modeling, advanced medical research and financial analysis. As they mature, they can also become a threat to existing IT security protocols, potentially breaking standard encryption keys used in online communications and data transmission, the report notes.
In addition, a new generation of emerging risks is linked to climate change, the company points out.
“Swiss Re identified the threat of climate change back in 1979. More than 40 years later, the effects of climate risks are being felt very strongly in our daily lives. Beyond what we already see, climate change is creating a new generation of emerging risks,” the paper emphasizes.
This year’s SONAR report explores how melting permafrost that covers a quarter of the northern hemisphere could not only damage infrastructure and accelerate climate change, but also release disease-causing pathogens that have been frozen for decades.
In addition, agriculture is particularly sensitive to climate change and is struggling to reduce its contribution to global warming. Emissions from global food production account for about 31% of total anthropogenic carbon emissions. The challenge for agriculture is to increase productivity and feed more people while reducing emissions. Insurers can play a vital role in the faster adoption and scaling up of sustainable farming practices by offering suitable risk coverage solutions and promoting climate-smart and regenerative agriculture, says Swiss Re.
“There was a time when today’s big issues such as climate change, the pandemic, geopolitical conflict and inflation were new risks in their own right. The 10th anniversary edition of SONAR is a poignant reminder of the long-term potential of emerging risks and how insurance the industry helps to increase the resilience of society,” the report says.
Swiss Re Group is one of the world’s leading providers of reinsurance, insurance and other forms of insurance-based risk transfer.
The National Bank of Italy and the National Bank of Ukraine (NBU) have launched a program for exchanging hryvnia for euros for Ukrainian refugees since June 21, the NBU press service reported on Friday.
According to the report, Ukrainians who have been granted a temporary residence permit in Italy or international protection will be able to exchange hryvnias in the amount of up to UAH 10,000 per person.
The exchange will be available at branches of the Italian Central Bank and branches of commercial partner banks (more than 400 branches throughout the country).
As reported, the hryvnia cash exchange program has already been launched in Poland, Germany, Belgium, Sweden and the Netherlands.
Turkish President Recep Tayyip Erdogan announced the change of the name of the country’s national airline from international to Turkish: instead of Turkish Airlines, it will be called Türkiye Hava Yolları, Sözcü newspaper reports.
“Turkey is no more, there is Türkiye. From now on, we will write Türkiye Hava Yolları instead of Turkish Airlines on the fuselage of our aircraft,” Erdogan said during a ceremony dedicated to the launch of the new Türksat 5B satellite into space.
According to Sözcü, the decision to rebrand was made as part of a program to recognize the country in the international arena as Türkiye, not Turkey. According to the authorities of the republic, this will increase the prestige of the country.
In June, the Turkish authorities sent a letter to the UN asking to change the name in all official documents. In turn, the organization granted the request and officially registered the name of the country as the Republic of Türkiye.
Turkish Airlines is Turkey’s flag carrier based in Istanbul. The company was founded in 1933 and operated flights within the country, and today the carrier has one of the most extensive route networks around the world.
More than 60% of CEOs and other top managers of companies around the world are afraid of a recession in their countries in the next 12-18 months, according to a survey conducted by the research company Conference Board.
Another 15% of respondents believe that their economies have already entered a recession.
The survey shows a sharp deterioration in sentiment among CEOs around the world. At the end of 2021, only 22% of respondents in a similar study noted recession risks, at the end of 2020 – 39%.
As part of the study, the Conference Board interviewed 750 directors of companies from different countries. The survey was conducted in May, that is, before the recent increase in the Fed’s rate by 75 basis points at once.
Top managers named the consequences of the war unleashed by Russia in Ukraine, problems in supply chains and the situation with coronavirus in China, as well as rising interest rates, as the main negative factors.
In addition, directors are concerned about rising energy prices, causing an increase in the cost of transport services.
“Fundamental economic factors such as rising energy prices and the implications for the cost of goods and transportation services are very important,” said George Oliver, chief executive officer of diversified industrial corporation Johnson Controls.
On fears of a recession, some companies have announced a suspension of hiring new employees or even layoffs.
“There is reason to believe that we are entering a recession phase after a 10-year period of economic growth,” Brian Armstrong, head of crypto exchange operator Coinbase, wrote in a letter to employees. “The recession means another winter in the cryptocurrency market, which may turn out to be long.”
Earlier, Coinbase announced plans to lay off 18% of the state, or about 1.1 thousand employees.
At the same time, companies in the United States are also facing another difficulty – a shortage of qualified personnel. This is facilitated by very low unemployment, which reached 3.6% in March.
Meanwhile, consumer confidence remains strong, said Conference Board senior economist Dana Peterson.
“Consumers are less worried about a recession than CEOs,” Peterson said. “But CEOs are trained to look at a 12 to 18-month horizon, and for most consumers, the horizon is three to six months.”
The supply of weapons to Ukraine from the United States under the lend-lease procedure has not yet begun and may start in a few months, says Secretary of the National Security and Defense Council (NSDC) Oleksiy Danilov.
“Lend-lease hasn’t started yet. But the adoption of the lend-lease law itself is a very positive decision for us. And lend-lease will be, the question is when. Here we come back to the fact that everyone’s clocks work differently in the war. For some, a day is like a day, but for us it’s completely different dimensions,” Danilov said in an interview with the League published on Saturday morning.
To a clarifying question when lend-lease arms deliveries are expected, he replied: “it could be July-August, maybe September.”
At the same time, Danilov said that there were “almost no Soviet-made ammunition of 122 and 155 mm caliber left.”
When asked how he assesses the results of Rammstein-3, the NSDC secretary replied: “We need to ask ourselves: who owes us something? To do this, we need to have a slightly different relationship with those countries that commit themselves. If our country were a member of NATO, it would be a completely different conversation.”
“Today we have to thank the countries that are helping us. There are a lot of them. We don’t know about all of them. A lot of countries ask not to voice the military weapons that they transfer to us. Time will pass and there will be our victory – we will thank everyone,” he said.
“No one will defend our country except us. Will they help us with weapons? They will. Will this weapon be enough? There are never enough weapons. But in this war, each country has its own tasks and visions for itself,” Danilov stressed.
Agro-industrial group Astarta, the largest sugar producer in Ukraine, refused to pay dividends for 2021 and will direct EUR94.1 million to the retained earnings reserve.
As stated in the message of the company on Friday night, such a decision was made by its shareholders meeting on Thursday.
Shareholders also approved Astarta’s continuation of the buyback program for up to 12.5 million shares (50% of those outstanding) at a maximum price of PLN125 per share.
In addition, the meeting delegated to the board of directors the right to issue shares and grant options in the amount of not more than 10% of Astarta’s authorized capital for one year.
The shareholders also instructed the board of directors to select an auditor company to audit the company’s financial statements for 2022. Candidates for the review include international drug companies Ernst & Young, KPMG, Deloitte & Touche, PricewaterhouseCoopers, Grant Thornton, BDO and Baker Tilly.
The meeting reportedly approved the replacement of Marc M.L.J. van Campen as a member of the company’s board of directors with Savvas Perikleous.
Astarta is a vertically integrated agro-industrial holding operating in eight regions of Ukraine. It includes six sugar factories, agricultural enterprises with a land bank of 220 thousand hectares and dairy farms with 22 thousand heads of cattle, an oil extraction plant in Globino (Poltava region), seven elevators and a biogas complex.
In 2021, the agricultural holding increased its net profit by 14 times compared to 2020 – up to EUR122.5 million, EBITDA – by 1.8 times, up to EUR201.5 million. Its revenue increased by 18.2% – up to EUR491.35 million, a third of which (EUR170 million) was generated by the production and sale of sugar.
