Financial and health risks feature on Swiss Re’s emerging risks sonar

In its latest SONAR Emerging Risks Insights report, the reinsurer highlighted 26 new emerging risk themes that could come to the fore within the next three years, or beyond. The emerging risks with the highest impact include cloud computing security, contagious emerging market crises and deflation triggered by a eurozone crisis. Changes in monetary policy in the US as the country emerges from the financial crisis could trigger investor panic in emerging markets, warned Swiss Re. For insurers, this could mean slower growth and poor investment performance. Similarly, a eurozone crisis leading to deflation could have a severe impact on insurers' revenues and assets, the reinsurer said. "In the aftermath of the financial crisis, many worried about a sharp increase in inflation due to elevated sovereign debt levels and the rapid expansion of central banks' money supply. However, deflation in the eurozone seems to be the new risk to watch," according to Swiss Re.hideAnother risk to keep an eye on is cloud computing. According to Swiss Re, the risks of moving more and more data to the cloud are still largely unknown. Cloud computing, in which access to data is shared, fuels risks such as data leakage, data loss and hijacking of computing resources, it said. An emerging risk with a high impact, but a time frame in excess of three years, is the threat of increased mortality from air pollution. Air pollution has been rising, in particular in China where its effect on health is already visible. The overall impact of air pollution on mortality is comparable to smoking and may reduce average life expectancy by 3-5 years, according to Swiss Re. E-cigarettes, concussion claims in sports and aluminium health issues were also identified as top emerging risks for liability insurers. The long-term health effects of e-cigarettes are not yet known, although concerns already exist for e-liquids, one of their key ingredients. E-liquids are potentially lethal neurotoxins that could pose a significant risk to public health and represent a serious hazard for those who manufacture e-cigarettes if proper precautions are not taken, Swiss Re warned. In recent years, claims associated with concussion injuries have become something of a liability crisis in US sports, with a number of lawsuits and settlements in contact sports like American football and ice hockey. In 2011 the first lawsuit was brought against the National Football League alleging that it knew of the long-term risks of concussions and failed to warn players. The US Center for Disease Control and Prevention estimates that there are between 1.6m and 3.8m sports and recreation-related traumatic brain injuries each year. Aluminium, a common ingredient in gastric drug treatments and underarm antiperspirants, is a neurotoxin that can alter the normal activity of the nervous system and cause damage to nervous tissue. Its long-term effects are unknown, although some studies suggest a possible linkage between aluminium salts and Alzheimer's disease, as well as to breast cancer and bone fractures, Swiss Re said. The SONAR report also drew attention to other medium to low impact emerging risks, including the collapse of oceanic ecosystems, 4D printing, smart cities, the use of methane hydrate as an energy source and financial consumer protection regulation.

Financial and health risks feature on Swiss Re’s emerging risks sonar

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