Willis report: Political polarization increasing worldwide

By Mia MacGregor

June 26 - (The Insurer) - Political polarisation is intensifying worldwide, and is often associated with heightened political violence and unpredictable policy shifts, according to the latest Political Risk Index by Willis.

The report underscores that affective polarisation, where individuals develop strong positive feelings toward their own group (in-group) and negative sentiments toward opposing groups (out-groups), is at a historic global high.

Willis suggested that this trend indicates a growing tendency for individuals to perceive supporters of opposing political parties as hostile.

Countries embroiled in violent political conflicts tend to exhibit the highest levels of polarisation. However, the report highlights that affective polarisation is escalating most rapidly in democracies such as the U.S., Germany, India, Brazil and Bulgaria.

Willis also observed that in democracies, spikes in polarisation often follow economic crises or corruption scandals that undermine traditional political leaders. These surges are frequently accompanied by the rise of populist movements and an increased occurrence of political violence.

Geopolitical and foreign policy divides can further exacerbate societal polarisation. Both the U.S. and Europe, as well as emerging markets, have growing trends of polarisation and populism.

US LEADS IN RISING AFFECTIVE, IDEOLOGICAL AND ELITE POLARIsATION

Additionally, the report found that among more than 170 countries and territories, the U.S. stands out for experiencing a significant rise in all three forms of polarisation (affective, ideological and elite) over the past 15 years.

While the U.S. does not lead in any single category, it is unique in seeing sharp increases across all three simultaneously. The report cites instances of violent social unrest in U.S. cities such as Los Angeles, Phoenix and Las Vegas, likely linked to changes in immigration policy.

Willis noted a strong correlation between all three types of polarisation and political violence.

According to the Varieties of Democracy database, expert-assessed affective polarisation strongly correlates with expert-assessed levels of political violence by non-state actors, including terrorism and riots. Ideological polarisation is similarly correlated with political violence organized by groups.

Willis warned that the U.S. currently faces particularly acute risks, as major protest movements historically arise in response to government policies opposed by social groups.

The new administration's rapid policy changes, implemented via executive orders in areas such as tariffs and immigration, may prompt contentious politics as people seek to overturn policies before the next national elections, according to the report.

Willis cautioned businesses in democratic nations to navigate increasingly polarised societies compared to 25 years ago.

Workforce polarisation can impact company culture, productivity, and employee safety, while polarisation among customers poses challenges for brand marketing.

CEO activism on polarised issues such as diversity or sustainability can provoke backlash, as seen in the U.S., where companies have faced boycotts after aligning with contentious views.

Willis also noted that the rise in ideological polarisation appears to have contributed to oscillations in public policy.

In the U.S., changes in government have been associated with fluctuating federal support for pipeline development and fracking, or large-scale imposition and then withdrawal of federal subsidies for clean energy or electric vehicles.

At its extreme, polarisation may trigger political violence, causing operational disruptions, property damage or security issues, potentially impeding safe and profitable operations.

In fragile democracies, elite polarisation may lead to attempted coups or irregular power transfers.

“Even in longstanding democracies such as the U.S., companies need to be prepared for the potential consequences of large-scale unrest, given the recent pace of policy changes and current high levels of political polarisation,” the report concluded.