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ScenarioRecovery scenarios from COVID-19 pandemic
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DescriptionThis analysis focuses on various scenarios relevant for recovering from the COVID-19 pandemic. To make the scenario realistic and practical it focuses on COVID-19 related factors in UK. You can adjust the scenario for your specific geography. The scenarios are being defined for financial services firms and may need to be adjusted for other industries.
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Scenario Drivers
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Note1 : The scenario drivers highlighed below are the key variables that need to be considered to construct relevant scenarios.
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Note2 : The drivers highlighted in blue color are new drivers discussed during the online workshop on 21Apr2020. These will be further updated by RiskSpotlight team.
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IDCategoryScenario DriverLevel 1Level 2Level 3Level 4
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SD01Business ImpactLevel of revenue impact during the lockdown - decrease compared to pre-crisis levelRevenues have fallen more than 80%Revenues have fallen between 41% - 80% Revenues have fallen 5% - 40%Revenues have fallen < 5%
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SD02Business ImpactLevel of revenue impact during the lockdown - increased compared to pre-crisis levelRevenues have increased by < 5%
Revenues have increased 5% - 40%
Revenues have increased 41% - 80%Revenues have increased > 80%
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SD03Business ImpactLevel of revenue - post lockdownRevenues stay below pre-crisis level for 2-3 years and firm goes bankruptRevenues stay below pre-crisis level for 2-3 years and then growRevenues stay below pre-crisis level for upto 2 years and then growRevenues grow immediately
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SD04Business ImpactLevel of business strategy update requiredBusiness strategy requires a complete resetBusiness strategy requires major updatesBusiness strategy requires minor updatesBusiness strategy requires no updates
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SD05Business ImpactLevel of damages during the lockdown e.g. large number of process failures, large number of IT system disruptions, large number of cyber incidents, large number of business projects paused/cancelledSignificant amount of damages suffered across many business areas during the lockdown Significant amount of damages suffered in some business areas during the lockdownMinor amount of damages suffered during the lockdownNo damages suffered during the lockdown
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SD06COVID-19 Human ImpactNo. of COVID-19 deaths in UK before vaccine is widely available25,000+10,000 - 25,000< 10,000
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SD07COVID-19 Human ImpactNo. of COVID-19 deaths globally before vaccine in widely available1 mln+250,000 - 1 mln< 250,000
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SD08COVID-19 Human ImpactState of infection spread in UK when lockdown is revokedNo. of new cases rising over the past 30 daysNo. of new cases have stabilised over the past 30 daysNo. of new cases have fallen over the past 30 daysZero cases identified in the past 30 days
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SD09COVID-19 Human ImpactState of infection spread globally when lockdown is revokedNo. of new cases rising over the past 30 daysNo. of new cases have stabilised over the past 30 daysNo. of new cases have fallen over the past 30 daysZero cases identified in the past 30 days
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SD10COVID-19 Human ImpactLevel of immunity in UK population when lockdown is revokedNot known/measured< 50%51% - 80%>80% are immunue
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SD11COVID-19 Human ImpactLevel of immunity in global population when UK lockdown is revoked - number of peopleNot known/measured< 50%51% - 80%>80% are immunue
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SD12COVID-19 Human ImpactStrength of immunity against COVID-19Immunity stays for less than 6 monthsImmunity stays for upto 2 yearsImmunity stays for upto 5 yearsImmunity is permanent
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SD13COVID-19 Human ImpactLikelihood of subsequent waves of COVID-19 infection>80%20% - 80%< 20%0%
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SD14COVID-19 Human ImpactExpected number of waves3-4 every year1-2 every year3-4 until vaccine is available1-2 until vaccine is available
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SD15COVID-19 Human ImpactMutation of the virusBecomes stronger over timeStays sameBecomes milder over time
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Capacity of health system to deal with number of cases
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Mental health impacts
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SD16COVID-19 Protection MeasuresCOVID-19 vaccine availability in UKWidely available after Dec 2021Widely available from Jul 2021Widely available from Apr 2021Widely available in Q4-2020
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SD17COVID-19 Protection MeasuresLevel of COVID-19 TestingWidely available from Q3-2021Widely available from Q1-2021Widely available from Q4-2020Widely available from Q3-2020
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SD18COVID-19 Protection MeasuresLevel of protection measures required for individuals e.g. social distancing, regular hand washing, wearing masks. Many protection measures required and mandated by the government Many protection measures required but are not mandated by the governmentSmall number of protection measures required are mandated by the government
No protection measures are required
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Level of confidence on effectiveness of protection measures
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Wide availibility of protection measures
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SD19CustomersLevel of customer fear in relation to physical proximity in UK after the lockdown is revoked>80% of customers remain fearful40% - 80% of customers remain fearful5% - 40% of customers remain fearful<5% of customers remain fearful
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SD20CustomersLevel of demand for products/services offered by the firmLevel of demand reduces by more than 80% permanentlyLevel of demand reduces by more than 40% permanentlyLevel of demand reduces by more than 25% for 12 months and recovers after that to the pre-crisis levelLevel of demand recovers to pre-crisis level soon after the lockdown is revoked
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Level of customers impacted by the crisis (e.g. unable to pay mortgage/loan)
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Duration over which the customers are impacted by the crisis
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Duration over which the government provides stimulus to affected individuals and organisations
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Level of customer churn
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SD21EconomicOverall level of economic activity in UKMany parts of economy are not fully functional until start of Q1-2022Many parts of economy are not fully functional until start of Q3-2021Many parts of economy are not fully functional until start of Q4-2020All parts of economy become fully functional soon after lockdown is revoked
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SD22EconomicOverall level of economic activity globallyMany parts of economy are not fully functional until start of Q1-2022Many parts of economy are not fully functional until start of Q3-2021Many parts of economy are not fully functional until start of Q4-2020All parts of economy become fully functional soon after lockdown is revoked in major countries (e.g. G20)
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SD23EconomicState of economic growth in UK after government lockdown is revoked (e.g. higher unemployment rate)Economy experiences depression for 3-5 yearsEconomy experiences depression for 1-3 yearsEconomy experiences depression for 1 yearEconomy grows to pre-crisis level and continues to grow soon after lockdown is revoked
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SD24EconomicState of economic growth globally after government lockdowns in major countries are revokedEconomy experiences depression for 3-5 yearsEconomy experiences depression for 1-3 yearsEconomy experiences depression for 1 yearEconomy grows to pre-crisis level and continues to grow soon after lockdown is revoked in major countries (e.g. G20)
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SD25EconomicLevel of international travelMajor restrictions remain in place on international travel until start of Q1-2022Major restrictions remain in place on international travel until start of Q3-2021Major restrictions remain in place on international travel until start of Q4-2020Major restrictions on international travel are lifted soon after lockdown is revoked in major countries (e.g. G20)
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SD26EmployeesEmployees who lost their life due to COVID-19 infection (UK)> 10%1% to 10%< 1%None
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SD27EmployeesEmployees with family members who lost their life due to COVID-19 infection (UK)> 10%1% to 10%< 1%None
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SD28EmployeesEmployees facing mental health issues due to COVID-19 related factors> 25%10% to 25%< 10%None
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SD29EmployeesLevel of employee fear in coming to offices in UK after the offices are reopened>80% of employees remain fearful40% - 80% of employees remain fearful5% - 40% of employees remain fearful<5% of employees remain fearful
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Number of employees requested work flexibility e.g. working from home full time or certain days in a week
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SD30GeopoliticalInternational co-operationCo-operation between countries regions stops for 2-4 years due to prioritisation of resources for local citizens preferred over allocating resources to help other countriesCo-operation between countries regions stops for 12-18 months due to prioritisation of resources for local citizens preferred over allocating resources to help other countriesCo-operation between countries regions stops for 3-6 months due to prioritisation of resources for local citizens preferred over allocating resources to help other countriesCo-operation between countries increases to ensure the virus can be defeated globally
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SD31GovernmentUK government lockdownImplements multiple lockdowns over 12-24 monthsOnly one lockdown which is revoked in phases. Fully revoked by end of Jun 2021Only one lockdown which is revoked in phases. Fully revoked by end of Dec 2020Only one lockdown which is revoked in phases. Fully revoked by end of Jun 2020
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SD32ResilienceAdditional shocks - UK2-3 additional large scale events occur in UK while firms are recovering from COVID-19 crisis e.g. natural disaster, another pandemic, terrorist attack. 1 additional large scale event occurs in UK while firms are recovering from COVID-19 crisis e.g. natural disaster, another pandemic, terrorist attack. 1-3 additional medium scale event occurs in UK while firms are recovering from COVID-19 crisis e.g. natural disaster, another pandemic, terrorist attack. No additional events occur in UK while firms are recovering from COVID-19 crisis
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SD33ResilienceAdditional shocks - Countries of interest (e.g. countries where outsourcing vendors are based)2-3 additional large scale events occur in a country of interest while firms are recovering from COVID-19 crisis e.g. natural disaster, another pandemic, terrorist attack. 1 additional large scale event occurs in a country of interest while firms are recovering from COVID-19 crisis e.g. natural disaster, another pandemic, terrorist attack. 1-3 additional medium scale event occur in a country of interest while firms are recovering from COVID-19 crisis e.g. natural disaster, another pandemic, terrorist attack. No additional events occur in a country of interest while firms are recovering from COVID-19 crisis
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SD34Value ChainState of firm's value chain participants (e.g. business partners, third-parties, customers)Many key participants in the value chain go bankrupt due to the crisis between Apr2020 and Sep2020Many key participants stay in business but are unable to be fully operational before end of Q2-2021Many key participants stay in business but are unable to be fully operational before end of Q4-2020All key participants stay in business and are fully operational before end of Q3-2020
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Change to timelines of regulatory events
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