With the world rapidly changing and evolving, what was the case 10 years ago is not the case today and will not be 10 years from now. As discussed in detail in this report, A Clearer View of Emerging Risks, new technologies can impact people in their everyday lives through the products we use, how long we live, how much we spend to keep ourselves healthy and where our information is stored. All of these carry inherent risks that are new to the world and that may not be a part of the historical dataset upon which (re)insurers rely for pricing and/or establishing proper risk controls.
In our Emerging Risks series that started two years ago and continues with this report, Guy Carpenter has sought to bring some element of clarity to what those risks are and, more importantly, how the (re)insurance industry would benefit by understanding and quantifying its exposures to these risks in order to mitigate capital depletion.
There are many challenges in creating a probabilistic data set that attempts to quantify unforeseen loss, unforeseen change in life expectancy or the unforeseen increase in medical costs and the impact these may have on (re)insurers.
(Re)insurers that innovate by anticipating the risks of new technologies, developing new products in response to those threats and solving for how to manage these exposures are likely to translate risk into opportunity.