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Quick Takes

Democracy Enters the 2020s in Global Retreat

Source: Freedom in the World, 2019

Democracy has been declining around the world for 13 consecutive years, according to Freedom House’s latest annual report. The number of “free” countries has shrunk to its lowest number since the post-Soviet collapse ushered in a wave of democratization across Europe in the 1990s.

Although the losses are still minimal compared to the significant global gains made throughout the 20th century, the signs are ominous as we enter a new decade. The rise of populism and the loss of confidence in political systems has shaken established democracies, while several fragile democracies in the post-Cold War era have struggled to maintain their progress. 

A total of 31 countries have revised top leadership term limits over the 13-year decline, while government attempts to punish public criticism and accountability — either through media crackdowns such as in Turkey, rhetorical condemnation as in the United States or digital censorship as in China — have escalated over the same period.

The Rising Urgency of Climate Change-Related Health Crises

Source: Marsh McLennan

Climate change is exacerbating existing health risks and costs and creating new ones. These effects will intensify over time and greatly challenge health care and life sciences, according to a new interactive climate health navigator, Climate Health Threat Illustrator, from Marsh McLennan. 

The data shows that 8.2 million annual excess deaths — or 73 deaths out of every 100,000 people — are forecast worldwide for 2100 due to extreme temperatures in a high-emissions scenario. In addition, 300 million people already live on land that will likely be underwater or annually flooded by 2050 due to sea-level rise, even in a low-emissions scenario. Health and socioeconomic disparities will continue to widen, as people and countries least able to cope are hardest hit.

How can health care providers, payers, life sciences and employers proactively respond to these challenges? Building resilience and reducing emissions are critical to mitigate potentially devastating climate-related health outcomes. Organizations can ensure continuity of care during crises and prepare for intensifying demands in the future. Industry leaders are also curbing their own emissions while incentivizing health care and life sciences to do the same. 

 

Rise in Carbon Emissions Brings Concern Over Building Sector’s Carbon Footprint

Source: The Global Status Report for Buildings and Construction (5th edition)

The operation of global buildings reached their highest-ever carbon emissions level in 2019 at 28% of total global energy-related carbon dioxide emissions, pushing the sector further away from achieving its Paris Agreement goals. That number jumps to 38% when emissions from building construction is accounted for, according to this year’s Global Status Report for Buildings and Construction

This year’s report highlights the disruptions from COVID-19 in the building and construction sectors, as well as introduces a new index to track the progress of climate initiatives. The pandemic slowed global construction activity, which led to a drop in global energy demand and carbon dioxide emissions — 5% and 7%, respectively. 

But COVID-19 also grew interest in and the market for “green” buildings as governments and key players in the buildings and construction sector plan for a post-COVID green recovery. However, these commitments and initiatives will need to rapidly increase in scale to get on track for a net-zero carbon building plan by 2050.

South Asia Sees a Shrinking Middle Class and Surge in Poverty

Source: Pew Research Center

More people moved into poverty in South Asia in 2020 compared to other regions globally, reversing years of progress in the region. South Asia also saw the biggest decline in its middle class, which decreased by 32 million people, while East Asia and the Pacific lost 19 million, according to Pew Research Center. 

Globally, there were 54 million fewer people in the middle class in 2020 than the pre-pandemic forecasted number. The global population living in poverty rose to an estimated 803 million — compared to the 672 million that was initially expected pre-pandemic. “The steep rise in global poverty is driven by the fact that many who were in the low-income tier prior to the pandemic lived on the margin of poverty,” according to Pew. 

The path to recovery remains unclear as regions start to revive their economies — although vaccine distribution has led to a rise in consumer confidence. The pace and strength of the recovery will depend on access to medical supplies, governmental support and regional economic and societal status prior to COVID-19.

Insurance for M&A Deals Surged in 2020

Source: Marsh

The communications, media and technology sectors held the highest number of insurance policies to protect M&A deals in 2020 according to new data from Marsh McLennan. Mergers and acquisitions in the technology sector held the most deal volume in the United States at $346.5 billion, a result of an increase in e-commerce, remote working and digital transformation in different sectors.

M&A activity in the U.S. was down 21% by value and 16% by deal count in 2020 compared to 2019. Despite this sudden halt in activity during the second quarter, transactional risk insurance in the U.S. and Canada reached record highs in the fourth quarter — ending in a total of $545 billion in deal value. Insurers shifted their focus to COVID-related impacts on companies.

The transactional risk insurance market will face multiple challenges in 2021, such as a continued increase in claims frequency and severity, rising costs and a focus by insurers on claims related to COVID-19. 

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