Swiss Re highlights emerging risk in latest report
Large natural catastrophes, financial repression, de-globalisation and the challenge posed by the Internet of Things are the four emerging risks with the highest potential impact.
This is according to Swiss Re’s new emerging risk insights report, published today (May 20, 2015), which looks at 21 emerging risk themes.
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.
On super natural catastrophes, Swiss Re explained that atmospheric river events and volcanic eruptions are not yet sufficiently taken into account as serious disruptors by a wide range of stakeholders.
According to the report, the US Geological Service published a study on a winter storm scenario called ARk, looking at the impact of an atmospheric event with a return period of 1000 years.
“Findings indicate that flooding would overwhelm flood protections in many areas, resulting in the evacuation of more than a million residents, direct property damage of nearly $400 billion and business interruption costs of about $325 billion. Insured property claims would add up to about $20–30 billion. These numbers are higher than those associated with an earthquake in southern California with similar likelihood,” it said.
Patrick Raaflaub, Swiss Re's chief risk officer, said: "In a future in which change is the only constant, foresight information is crucial to prepare for tomorrow's challenges. This report seeks to provide an early indication of what might lurk beyond the horizon. While many of the topics presented might never materialise into significant risks, some definitely will. The earlier we start adapting to these changes, the better prepared we will be."
“The insurance industry could and should expand its role of mitigating others' risks and enabling society to advance,” added the report.
