Reduced market access and regulatory fragmentation are key future risks
Reduced market access, regulatory fragmentation, the return of inflation, cloud risk accumulation and emerging liability legislation for artificial intelligence, are some of the key risks identified in a new report by Swiss Re.
The reinsurer’s ‘SONAR’ publication is based on a crowdsourcing tool drawing on what Swiss Re calls its unique internal risk management expertise "to pick up early signals of what lies beyond the horizon".
The report offers insights into emerging risks and highlights a number of emerging trend spotlights. The report stresses that foresight of such risks is critical for the industry if it is to respond adequately.
"Ignoring emerging risks is not an option, neither for political decision-makers, the insurance industry, nor society as a whole. The earlier we adapt to these changes, the better prepared we will be," said Patrick Raaflaub, Swiss Re's group chief risk officer.
"Sharing knowledge through a proactive risk dialogue across stakeholders can help the insurance industry create a pro-active and pre-emptive risk management culture that enables disciplined risk-taking. That is an important step to help society as a whole to become more resilient."
The report identified six risks with the highest potential impact. These included: reduced market access and the emergence of protectionism; Regulatory fragmentation undermining re/insurers' ability to act as stabilizers in the financial markets; the return of inflation, which could hit insurers' profitability; cloud risk accumulation, which could lead to multiple losses simultaneously; water crises in various parts of the world; and infectious diseases and a potential pandemic.
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