View this article online: https://www.insurancejournal.com/news/international/2012/01/24/232524.htm
A bulletin from Willis Group Holdings identifies 18 “emerging risks,” as causing increasing concern among the world’s insurance community. Willis compiled the list from its new website of intellectual capital, WillisWire.
While “headline-grabbing events” – the euro zone crisis, the Arab Spring, natural catastrophes like the Japanese earthquake and Thai floods – have all received extensive exposure and commentary, “new risks are emerging that could blindside business executives,” Wills warns.
The WillisWire survey identifies a number of these new risks that it says “may gain more popular consciousness in 2012. They are the type of “thorny problems that may be keeping risk managers up at night, from fracking to cyber terrorism, space tourism and uncertainty around renewables caused by national energy policies.”
Willis said bloggers on the new site “together represent many of the broker’s subject matter experts.” WillisWire has received on average nearly 9,000 page views a month since its launch in September 2011.
The survey focuses on 18 emerging risks facing industries as diverse as Energy, Banking, Captives and Power & Utilities. The blog also polls readers asking them to identify which of the risks listed they think will have the greatest impact in 2012.
The WillisWire round-up identified the following risks as being of the greatest concern:
• Energy: “Fracking”
• Environmental: “Fracking”
• Mining: “Contingent Business Interruption”
• Supply Chain Interruption: “Issues at Subtier Suppliers”
• Trade Credit – “Political-Economic Turmoil”
• Financial Institutions: “Bradley Manning 2.0”
• Terrorism: “Cyber Terror”
• Aerospace: “Space Tourism”
• Power & Utilities: “Sodium-Sulfur Batteries”
• Health Care: “Booming Physician Employment”
• Renewable Energy: “Uncertainty Caused by National Energy Policies”
• Captives – “Transfer Pricing”
• Political Risk: “Continued Unrest in Egypt & Libya”
• Analytics: “Over-Reliance on Models”
• D&O: “International Cooperation of Regulators”
• Engineering: “‘Hold Harmless’ Legal Contracts”
• Life Sciences: “‘No Fault’ Compensation for Clinical Trial Patients”
• Employee Safety: “Obesity Epidemic”
Willis notes that some of the risks “might not yet be front-and-center on companies’ radars, like the ‘perfect storm of cross-border cooperation between regulators’ brewing outside boardrooms globally. Other exposures, like the risks associated with hydraulic fracking for natural gas, have been growing in significance lately, with several lawsuits (but no big claims as of yet) making insurance hard to find.”
In addition the list expands the ramifications of well-known risks, like Supply Chain disruption, which are “becoming increasingly prevalent in today’s globalized market, with industries like Mining and Energy bearing the brunt.”
Willis’ Trade Credit blogger Andrew Van Den Born, an Executive Director of the broker’s Financial Solutions division, cited Iran’s threat to close the Straits of Hormuz – “one of the most strategically important choke points for traded seaborne oil” as an example of an event that “could trigger a supply chain meltdown in the oil and gas industry.”
Looking into the not-so-distant future, WillisWire’s Financial Services Practice Leader and blogger, Richard Magrann-Wells predicts that “Bradley Manning 2.0 – a bright programmer with an Ivy League education and an access card working at a technology, bank or credit card company is a new threat that financial institutions should work to protect themselves against.”
Source: Willis Group Holdings