Emerging Risks: A proactive view from insurance industry. Reto Schneider. Swiss Reinsurance Company. Slide 1
Emerging Risks: A proactive view from insurance industry by Reto Schneider Head Emerging Risk Management Swiss Reinsurance Company p y Emerging Risks:...
Emerging Risks: A proactive view from insurance industry by Reto Schneider Head Emerging Risk Management Swiss Reinsurance Company p y Emerging Risks: A proactive view from insurance industry Reto Schneider Head Emerging Risk Management
Slide 1
Emerging Risk Landscape (extract) Ageing infra infrastructure
Telemedicine Privatisation
Implants Cyber risk
Collective redress in Europe Space weather th
Food contaminants
Cloning
NanoDeteriorating technology safety standards Bogus parts
Caldera eruption
Loss of reputation Offshore & Internet Stress at work market Media risk Botox Environmental Liability in Europe
Power System break d down
Organised Contingent Alcohol Endocrine dis- crime Climate change Toxic mold Business Mega Tsunami ruptors liability Interruption Demographic shifts Customised Emerging Risks: A proactive view Invasion RSI Dirty bombs from insurance industry drugs of Reto Schneider Spread of Intercontinental privacy Resistance to Head Emerging Risk Management Pervasive diseases Drinking antibiotics data transcomputing Slide 2 water quality mission
Indoor pollution ll ti
Electro smog
“Emerging risks are newly developing or changing risks (old risks in a new context) which are difficult to quantify and may have a major impact on Swiss Re’s current or future P&L and balance sheet.”
High uncertainty Identification/prioritisation and quantification difficult Æ Risk transfer difficult
Regulatory/industry involvement often needed Emerging Risks: A proactive view from insurance industry
- unintentional - not quantified q - no additional premium earned
Reto Schneider Head Emerging Risk Management
Lack of regulatory framework Lack of industry’s best practice
Slide 3
Æ“First mover disadvantage”
Importance of risk communication Reducing the risk of developing a phantom risk
Detection of weak signals Swiss Re’s SONAR Systematic Ob Observations i off Notions Associated with Risk
early indicators
occurrences
claims, losses
Observer Observer Observer Observer
SONAR officer
Review Board
Group ERM
Emerging Risks: A proactive view from insurance industry Reto Schneider Head Emerging Risk Management
Slide 4
f d freedom tto actt time for adaptation
risk assessment was predominantly retro-focussed fast change requires a more proactive approach
Risks have become increasingly inter-dependent inter dependent and complex! Flood
GHG emissions
Sea level
Drought
Storms
Ecosystems
Food security Climate Change
GHG regulation
Health effects
Energy security I Investments Emerging Risks: A proactive view from insurance industry Reto Schneider Head Emerging Risk Management
Slide 5
Migration
Conflict
“Emerging loss” hypothetical path Most likely Least likely Costs
High
duty to closely monitor over the entire period
Asbestos Lead Silicon Implants CCA
Emerging Risks: A proactive view from insurance industry Reto Schneider Head Emerging Risk Management
Slide 6
pa ayout
MTBE
competent signals
Low
Stages:
Phenomenon
Damage emergence
Interest group action
causal link Regulation
Litigation compensation
Climate litigation – An outlandish risk?
story telling Andreas EmergingSpiegel Risks: A proactive view from insurance industry Ivo Menzinger Reto Schneider g conf. Swiss Re Liabilityy Regimes Head Emerging Risk Management 26 February 2008 Slide 7
There was a time when asbestos claims were perceived implausible
How will climate change litigation develop further?
Think the unthinkable as the unthinkable may not be so far!
Emerging Risks: A proactive view from insurance industry Reto Schneider Head Emerging Risk Management
Slide 8
Challenge ourselves to consider the unthinkable! What is new, changing h i or atypical? t i l? Thi Think k iin scenarios i and dd detect t t th the risks i k off tomorrow!
What do we need to do from an insurance perspective
Emerging Risks: A proactive view from insurance industry Reto Schneider Head Emerging Risk Management
Slide 9
Anticipate issues that may create problems in the future/may be difficult to manage (long lasting, chronic effects, low probability, high severity)
See the big picture and the technical details
Capture issues that are relevant to different sectors ( (economy, technology, t h l socio-politics, i liti environmental) i t l)
Capture issues that impact the industry in different countries/markets, even globally (accumulation potential)
