AI and disruptive tech named as top emerging risk by risk managers
Artificial intelligence (AI) and other disruptive technologies have been identified as the top emerging risk by a survey of risk managers.
The study, jointly produced by the US-based Casualty Actuarial Society (CAS) and the Society of Actuaries (SoA), asked risk managers to rank their biggest current and emerging concerns.
The results, unsurprisingly, were influenced by recent global events, namely heatwaves and extreme weather, as well as conflicts in Ukraine and the Middle East.
But it was the rise of generative AI platforms like Chat-GPT that topped the rankings.
The survey was conducted in two parts. Firstly there was an initial poll back in November 2023 that saw climate change voted the most urgent risk, ranking first both as an emerging threat and as part of combination risks. This was followed by a ‘flash’ survey in May that pushed climate change and extreme weather down to fourth place and disruptive technology to the top spot.
While the SoA and CAS conceded that the difference in the two survey results may have been influenced by recency bias, the rise of disruptive technology has been an acute trend in recent years.
It did not appear anywhere in the survey conducted in 2022 or earlier, and only came to light as a concern following the launch of Chat-GPT in November 2022.
Since then, it has risen to the top risk, followed by cyber risk, war, climate change and volatility.
The survey also looked at which current risks had been stress tested by risk managers, a question that produced some imbalances. For example, political extremes were cited as the biggest current concern but had only been stress tested by 4% of respondents.
Financial risks such as inflation and economic slowdown were the most stress tested, by 59% and 30% respectively. But data/cyber threats and generative AI were only stress tested by 17% and 3% respectively, despite being seen as more pressing concerns.
The November survey also looked at so-called combination risks, where exposures either correlate or happen in parallel, with the rankings as follows:
- Climate change and natural disasters: severe weather
- Cyber/networks and disruptive technology
- Asset price shock and financial volatility
- Climate change and loss of freshwater services
- Terrorism and wars (including civil wars)
The November and May surveys canvassed 133 and 163 risk managers respectively, the majority of which (81%) were based in North America.
