Summary
On June 25, 2025, Willis Towers Watson PLC (WTW, Financial), a leading global advisory, broking, and solutions company, released its latest Political Risk Index. The report highlights the increasing political polarisation worldwide, which is linked to heightened political violence and erratic government policies. The index focuses on the drivers and consequences of political polarisation, with findings indicating that affective polarisation is at a historic high globally, particularly in democracies such as the US, Germany, India, Brazil, and Bulgaria.
Positive Aspects
- The report identifies hopeful trends where truth and reconciliation processes, cross-party coalitions, and transparent investigations have led to reductions in political polarisation.
- Willis Towers Watson provides data-driven insights that can help organizations navigate the challenges posed by political polarisation.
Negative Aspects
- Political polarisation is associated with increased political violence and unpredictable government policies.
- The US is experiencing rapid increases in affective, ideological, and elite polarisation.
- Polarisation is rising both in developed regions like the US and Europe and in emerging markets.
Financial Analyst Perspective
From a financial analyst's viewpoint, the rising political polarisation highlighted in the report could lead to increased market volatility and risk for investors. Companies operating in highly polarised regions may face challenges such as regulatory changes, supply chain disruptions, and reputational risks. Investors should consider these factors when evaluating potential investments in affected countries.
Market Research Analyst Perspective
As a market research analyst, the findings of the Political Risk Index suggest that businesses need to be more vigilant in monitoring political developments in their operating regions. Companies should develop strategies to mitigate risks associated with political polarisation, such as diversifying their markets and engaging in proactive stakeholder management. Understanding the local political landscape will be crucial for maintaining stability and growth.
Frequently Asked Questions
What is affective polarisation?
Affective polarisation refers to individuals developing strong positive feelings toward their own group and negative feelings toward opposing groups, leading to increased hostility and reduced willingness to compromise.
Which countries are experiencing the fastest rise in affective polarisation?
Democracies like the US, Germany, India, Brazil, and Bulgaria are experiencing the fastest rise in affective polarisation.
What are some hopeful trends identified in the report?
Hopeful trends include truth and reconciliation processes, cross-party coalitions, and transparent investigations, which have led to reductions in political polarisation.
Read the original press release here.
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