De-globalization and political conflict, large natural catastrophes, financial repression and the challenge posed by the “Internet of Things” are some of the risks identified in this year’s “New emerging risk insights” report published by Swiss Re.
The publication is based on the SONAR process, a crowdsourcing tool drawing on Swiss Re’s internal risk management expertise to identify and evaluate new threats.
Emerging risks are newly developing or changing risks, which are difficult to quantify and whose potential business impact is not yet sufficiently taken into account, Swiss Re said.
“In a future in which change is the only constant, foresight information is crucial to prepare for tomorrow’s challenges,” said Patrick Raaflaub, Swiss Re’s Group chief risk officer.
“This report seeks to provide an early indication of what might lurk beyond the horizon. While many of the topics presented might never materialize into significant risks, some definitely will. The earlier we start adapting to these changes, the better prepared we will be,” Raaflaub added.
The report focuses on a wide variety of risks, relevant to life and non-life insurance areas. Highlights from this third edition include scarcity of raw materials, increased traffic in the skies, decaying critical infrastructure, and the use of self-tracking tools.
Pandemic risks, the proliferation of vertical cities and the dangers of LED light are also highlighted.
The topics presented may not only bring additional downside risk exposure, the report said, but could also give rise to new opportunities. The insurance industry could and should expand its role of mitigating others’ risks and enabling society to advance.
In addition to the emerging risks listed above, the report also listed other emerging risks along with degrees of potential impact:
- Brazilian drought (medium potential impact)
- Lifestyle drugs (medium)
- Predictive maintenance (medium)
- Wildfires (medium)
- Sinking cities (medium)
- Genetic engineering (medium)
- Challenges of the energy transition (medium)
- The antibiotic boomerang (medium)
- Hydrofracking fluids (medium)
- Fossil fuel mismanagement (low potential impact)
- Office of the future (low)
- Chemicals in the environment (low)
Source: Swiss Re
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