Swiss Re's 2017 SONAR report features 20 new emerging risk themes and six emerging trend spotlights. Although some of these are specific to the re/insurance industry, many should be on the radar of all organizations.
The publication is based on the SONAR process, a crowdsourcing tool drawing on Swiss Re's 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. Emerging risks are newly developing or evolving risks that are difficult to quantify and sometimes not fully understood, but potentially have an impact on the industry and society. Emerging trend spotlights examine early development, which may offer both opportunities and risks in the future.
"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", says 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."
High risks anticipated to be an issue within the next three years include ‘cloud risk accumulation’: cloud services have become widespread, for business, but as the cloud accumulates data-sets and services on an ever-increasing scale, it also generates a variety of risks that may accumulate to a ‘perfect storm’, for example by a cyber-attack or a power blackout.
High risks anticipated to become an issue after the next three years include:
- Increasing water stress: while the US Southwest is in an on-going water crisis, similar situations can be found around the world; from Southern Europe and the Mediterranean to Africa, parts of Asia and Latin America. The risks range from wildfires, competition for water among the energy and agricultural sectors to mass migration and wider conflict potentials.
- Underestimated infectious diseases: the question is not whether deadly infectious diseases will appear, but when and how society is prepared to cope with them.