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Political polarisation is rising globally and posing new challenges for businesses, according to Willis latest report

1. Political polarisation rises globally, especially in democracies like the US. 2. Economic crises often increase polarisation, impacting traditional political beliefs. 3. Rising populism and political violence correlate with higher polarisation levels. 4. Past trends show reconciliation efforts can reduce polarisation effects. 5. Businesses face challenges operating in increasingly polarised environments.

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Why Neutral?

While rising political polarisation could lead to instability, WTW's service offerings may mitigate risks. Historical examples show that firms like WTW often perform well during periods of volatility by offering strategic insights.

How important is it?

The article discusses trends in political risk, which shapes WTW's advisory services, indicating ongoing relevance to company operations and client strategies.

Why Long Term?

The impact of political polarisation tends to unfold over extended periods, with gradual shifts in market sentiment and policy over time.

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June 25, 2025 04:44 ET  | Source: Willis Towers Watson US LLC LONDON, June 25, 2025 (GLOBE NEWSWIRE) -- Rising political polarisation is associated with increased political violence and unpredictable oscillations in government policies, according to the latest Political Risk Index by Willis (NASDAQ: WTW), a leading global advisory, broking, and solutions company. This edition of the Index focusses on political polarisation in countries worldwide and its main drivers and consequences. Findings from the index reveal affective polarisation* is at a historic high, on a global average basis. This suggests that people are increasingly likely to perceive supporters of opposing political parties as hostile. Countries enduring violent political conflicts tend to be the most polarised, but on average, affective polarisation is rising fastest in democracies like the US, Germany, India, Brazil and Bulgaria. The index also covers ideological polarisation** (the degree to which people agree on core policy issues) and elite polarisation*** (the degree to which political rivals consider each other as legitimate). The US is the only country globally where affective, ideological and elite polarisation have all increased at a rapid pace over the past 15 years. After reviewing over a century’s worth of data from more than 200 countries, Willis found that in democracies, surges in polarisation tended to follow economic crises or corruption scandals, which appeared to discredit traditional political leaders. These surges were often accompanied by the growth of populist political movements and an increased frequency of political violence events. Other key findings include: The highest levels of affective polarisation globally are in countries where political competition happens along ethnic or religious lines.Long-serving political leaders and controversial populists are a polarising force in several countries.Geopolitical and foreign policy divides can also lead to polarisation of societies.Polarisation and populism are rising both in the US and Europe and in the emerging world. The research also identifies some hopeful trends. Truth and reconciliation processes, cross-party coalitions, and open and transparent investigations in cases of corruption or other crises have been accompanied by rapid reductions in political polarisation in the past. There is reason to believe that lessons from these examples could be applied to current challenges. Sam Wilkin, director of political risk analytics at Willis, said: “There is a well-established correlation between polarisation and political violence. But polarisation is also being felt on a more personal basis, such as how we perceive our friends and colleagues. Businesses face growing challenges from operating in increasingly polarised societies.” The complete report can be downloaded here.   *Affective polarisation refers to the phenomenon of individuals developing strong positive feelings toward members of their own group (in-group) and negative feelings towards members of opposing groups (out-groups), particularly in a political context. It involves a difference between how people feel about their own party or group and how they feel about those who support opposing parties or groups. This can lead to increased hostility, reduced willingness to compromise, and a lack of empathy for those with different political views.  **Ideological polarisation refers to the extent to which political attitudes become more divided and extreme, often along partisan lines. This can manifest as individuals and groups holding increasingly divergent views on issues, and a greater emphasis on partisan identity over shared values or common ground.  ***Elite polarisation refers to the ideological divide and political disagreement among elites—such as elected officials, party leaders, policymakers, and influential media figures—typically along partisan lines. About WTW At WTW (NASDAQ: WTW), we provide data-driven, insight-led solutions in the areas of people, risk and capital. Leveraging the global view and local expertise of our colleagues serving 140 countries and markets, we help organizations sharpen their strategy, enhance organizational resilience, motivate their workforce and maximize performance. Working shoulder to shoulder with our clients, we uncover opportunities for sustainable success—and provide perspective that moves you. Learn more at wtwco.com. Media contact Lauren David: Lauren.david@wtwco.com / +44 7385947619 Candela Farroni: Candela.farroni@haggiepartners.com / +44 7795 155654

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