Swiss Re report reveals top future insurance risks
Swiss Re released its SONAR report, highlighting 21 emerging risks that are posing threats to the reinsurance industry.
The Swiss Re SONAR report offers insights into emerging risks across life and non-life insurance industries, particularly those that are still developing or evolving and thus their potential impact and scope are not yet sufficiently taken into account.
The report noted that the risks with the highest potential impact were 'Emerging market crisis 2.0', 'the great monetary experiment' and 'internet fragmentation'.
'The great monetary experiment' was noted as a life insurance-related emerging risk with a high potential impact within the next three years, according to the report.
"The long-term costs of negative interest rates and unconventional monetary policies are still unknown, but could include a broader loss of confidence in the monetary system and lead to much higher inflation," the report said.
"Negative interest rates will further undermine the conventional business model of the insurance industry, particularly life insurers and pension funds."
'Gene drives' and 'precision medicine' were other life insurance-related emerging risks noted in the report.
Swiss Re group chief risk officer Patrick Raaflaub said that risk management should have a forward-looking strategy in order to be effective.
"It is about anticipating future ones to make sure we will be in a position to deal with them," Mr Raaflaub said.
"These risks may only fully reveal themselves to future generations.
"That doesn’t mean that we shouldn't act today to reduce uncertainty and alleviate their burden."
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