Artificial intelligence-generated misinformation and disinformation is now a Top 5 short-term and long-term risk, according to the World Economic Forum’s Global Risks Report 2024.
“That was the first time that actually was one of the Top 5 risks, and that in itself obviously has an impact on geopolitical tensions,” Sonia Kundi, chief risk officer at Zurich Canada, told Canadian Underwriter during an interview at the RIMS Canada Conference last month in Vancouver. “If there’s all the fake news going on, it has an impact on companies.”
AI-generated misinformation and disinformation “may radically disrupt electoral processes in several economies over the next two years,” the report reads. “A growing distrust of information, as well as media and government as sources, will deepen polarized views — a vicious cycle that could trigger civil unrest and possibly confrontation.
“There is a risk of repression and erosion of rights as authorities seek to crack down on the proliferation of false information — as well as risks arising from inaction.”
The report ranks misinformation and disinformation as the top risk of more than 1,400 respondents over the short term (two years) and in fifth spot in the long term (10 years). It defines the risk as “persistent false information (deliberate or otherwise) widely spread through media networks, shifting public opinion in a significant way towards distrust in facts and authority.”
As an example, Kundi points to a recent case in which a finance worker at a multinational firm was tricked into paying $25 million to fraudsters who used deepfake technology to pose as the company’s chief financial officer in a video conference call.
“We’ve seen it happen. It’s happening. This is real.”
Kundi was part of Excellence in Risk Management: Global Risks 2024, a panel discussion at the RIMS Canada conference. The session used the global risks report — authored by the World Economic Forum in collaboration with Marsh McLennan and Zurich Insurance Group — as a starting point to discuss issues such as geopolitical, climate and cyber trends.
Connecting the dots
One takeaway from the session was the interconnectivity of risk, Kundi says. Prior to COVID, risks were typically looked at from a siloed approach.
“But when the pandemic happened, well, [we saw risks] had an impact on the supply chain, which has impacted the economy, which has impacted everybody in terms of everything’s gone up in price, groceries have gone up, which in turn has a knock-on effect on mental health,” she says. “So, you have all these different risks that we’d, I think, previously looked at in isolation.
“You can’t really look at things in isolation anymore.”
During the panel, speakers also stressed the importance of involving risk managers in strategy conversations and meetings, “so that they understand the direction of the business, so that [insurers] can be more proactive in providing the support needed. Then take a step back and actually say, ‘Okay, all these geopolitical tensions that are happening across the world, how could that potentially impact our business?’”
Extreme weather events were another top global risk in the report, at the Number 2 spot in the short term and Number 1 over the long term. Canada itself has not been immune to these events, culminating in $7.1 billion in insured damage from four major Cats this summer and $7.7 billion to date. That compares to $3.1 billion for all of last year.
Again, interconnectivity of risk also comes into play with severe weather. “Hurricane Helene and the impact it had in Asheville, [North Carolina], for instance, was worsened by aging infrastructure in the city, the bridges, the dams…” Kundi says.
Adds the global risk report: “[Countries] are grappling with the impacts of record-breaking extreme weather, as climate-change adaptation efforts and resources fall short of the type, scale and intensity of climate-related events already taking place.”
Feature image by iStock.com/Baris-Ozer
