The latest Swiss Re Institute SONAR report has highlighted a number of key risks including digital technology’s clash with legacy hardware, new risks emerging from the spread of 5G mobile networks, increasingly limited fiscal and monetary policy flexibility, and genetic testing and its effects on the insurance industry. The report also examines ‘slowburner’ emerging risks such as the effects of climate change on public health.
Swiss Re said the SONAR report aims to initiate an informed dialogue about the future risk landscape that might lie ahead. “The publication is based on the SONAR process to pick up early signals of what lies beyond the horizon. The identified risks are presented with the goal of helping industry players prepare for new scenarios by adapting their behaviour, market conduct and product portfolios,” said Swiss Re.
The report features 15 emerging risk themes and five emerging trend spotlights that the re/insurance industry needs to have on its radar. Other risks and trends presented in the report range from increased global vaccine hesitancy to geographically shifting markets.
The report highlights five risks with high potential impact on the industry. Firstly, new technologies meeting ageing infrastructure. “Technological improvements are ongoing. Hardware in areas of critical infrastructure, including smart electric power grids or pipelines and hospitals, however, is often outdated. As a consequence, insurers face higher risk accumulation and unexpected loss potential in the areas of property damage, bodily injury, business interruption and cyber risk,” the report states.
Secondly, the spread of 5G technology, with current concerns regarding potential negative health effects from electromagnetic fields likely to increase. In addition, hackers can also exploit 5G speed and volume to acquire (or steal) more data faster, the report states, also pointing to possible privacy and security breaches, as well as espionage.
Thirdly, the report notes that there is a growing consensus that another economic downturn will need a fiscal response. The re/insurance industry could benefit if changes to policy bring growth and financial stability. However, a rise in uncertainty, causing higher financial market volatility and declines in asset valuations, is a potential risk factor.
Fourthly, the growth of genetic testing, with genetic tests now increasingly available and affordable for individual use and widely adopted by public health systems, with significant implications for life insurers, both in regard to data management and regulatory constraints.
Finally, the report examines the issue of climate change and public health. “The most pronounced risks from climate change affecting human health stem from heatwaves, floods, droughts, fires and vector-borne diseases. Millions of lives and healthcare services could be at risk. Without action, mortality rates and healthcare costs could soar, with significant consequences for the health, workers’ compensation and life insurance lines of business,” the report states.
Full article on Commercial Risk (subscription required)
SONAR_report
© Commercial Risk Europe
Key
Hover over the blue highlighted
text to view the acronym meaning
Hover
over these icons for more information
Comments:
No Comments for this Article