Swiss Re has outlined the new and emerging risks the re/insurance industry will face over the next few years in its latest insights report.
Out of 21 emerging risk themes, Swiss Re identified super natural catastrophes, financial repression, de-globalisation and the challenge posed by the Internet of Things as the four emerging risks with the highest potential impact.
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.
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."
Swiss Re, Emerging Risks, Natural Catastrophes, Bermuda, Europe, North America, Patrick Raaflaub