Swiss Re shines spotlight on emerging risks

Executive says it’s not about forecasting but preparing for potentialities

Swiss Re shines spotlight on emerging risks

Risk Management News

By Terry Gangcuangco

“The more transparency and the more time we have, the better we can adapt to the changing risk landscape.”

Those were the words of Swiss Re group chief risk officer Patrick Raaflaub when the insurance giant released its SONAR report for 2018. The annual report, based on a crowdsourcing tool that draws on Swiss Re’s internal risk management expertise, has identified emerging risks that are relevant not only to life and non-life insurance areas but also to asset management.

In addition to offering insights into hard-to-quantify newly developing or evolving threats, the publication also highlights emerging trend spotlights. The goal is to assist industry players in preparing for eventualities by adapting behaviour, market conduct, and product portfolios.

Swiss Re said the top perils with the highest potential impact include emerging geopolitical risks, the erosion of risk diversification, the re-emergence of asbestos, as well as risks from new technologies.

“A new multi-polar world is evolving in the geopolitical landscape as power drifts to Asia, democratic influences decline, and the relevance of global governance institutions erodes,” noted Swiss Re. “Possible turmoil in financial markets and possible erosion of legal rules could threaten the ability to run global businesses.”

Also, according to the Zurich-headquartered firm, national protectionism and regulatory fragmentation are jeopardising the benefits of international diversification, while discriminatory bias within algorithmic applications presents the risk of having defective modelling and prediction. Another top risk is cyber, particularly dormant threats that ‘lurk’ or remain undetected for a long time.

“Our SONAR report is not about forecasting the future or covering all emerging risks, but rather about preparing for its potentialities,” said Raaflaub.

 

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