Lloyd’s of London
Global demand for food is on the rise. This is driven by unprecedented growth in the world’s population and widespread shifts in consumption patterns as emerging economies develop. It is predicted that global agricultural production will need to more than double by 2050 to close the gap between food supply and demand.
Most global food security discussions have focused solely on these long-term pressures. However, as they intensify, the global food system is becoming increasingly vulnerable to acute shocks. Sudden disruption to food production could reduce global food supply and trigger a spike in food prices, leading to substantial knock-on effects for governments, businesses and communities.
Food System Shock, the latest report from Lloyd’s Innovation Series, considers the implications of acute disruption to global food production for insurance and risk modelling.
Experts on food security and sustainable development economics were asked to develop a scenario describing a plausible disruption to the food system that would affect multiple agricultural commodities and regions, and describe its consequences. The implications of this scenario for the insurance industry were then explored in two workshops with insurance industry practitioners, the results of which inform this report.