A recent report by a reinsurance powerhouse has revealed the top emerging risks that re/insurance companies should keep under their radar.
Swiss Re’s 2017 SONAR report has identified reduced market access, regulatory fragmentation, return of inflation, and cloud risk accumulation as the challenges that pose the highest downside risk potential in the short term.
Also making it to the top six risks with the highest potential impact on the industry and society are growing water stress and underestimated infectious diseases – both of which are expected to manifest three years from now.
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The report’s findings, which features 20 emerging risk themes and six emerging trend spotlights, were based on the SONAR process – a crowdsourcing tool that “picks up early signals of what lies beyond the horizon” using Swiss Re’s internal risk management expertise.
In a statement, Swiss Re said it presented the risks in order to help industry players prepare for new scenarios “by adapting their behaviour, market conduct, and product portfolios.”
“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 CRO.
“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”
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