SONAR 2023: New emerging risk insights

Geopolitical tensions and financial market volatility persist in the post-pandemic world marked by the war in Ukraine, rising interest rates and inflation. In parallel, global polarisation and conflict may give rise to mutually exclusive markets. Even the risk of nuclear events is heightened. Inflationary pressures bring into question the sustainability of sovereign debt across the globe. The threat of a new pandemic still looms. The recent outbreaks of Avian influenza are the largest to date, in different parts of the world.

Technological advances continue to drive societal and economic change. The spread of the digital economy offers new opportunities for insurers, such as embedded insurance or cost savings in product testing, design and maintenance with the integration of digital twins. But the expanding use of machine learning systems will expose more services to potential flaws and manipulation. Increased digitalisation of various services, such as growing reliance on digital payments, brings about new vulnerabilities of power shortages and cyberattacks that may paralyse large sectors of the economy. Digitalisation also raises questions around ownership and liability, as is the case with the rise of generative artificial intelligence.

Growing concerns around the mental health impacts from addictive online platforms are putting liability pressure on social media platform providers. Medical innovations in drug development and care technology make it more difficult to predict mortality and morbidity trends. While life expectancy among a rapidly ageing population is growing, healthy life expectancy is not increasing at the same pace.

New risks arise from toxic chemicals introduced decades ago that are now being scrutinised for their potential to harm people and the environment. The need to reduce pollution and resource depletion in the future is accelerating the circular economy. But new liabilities emerge as businesses need to rethink entire logistics concepts to promote sustainable recycling.

Other new emerging risks include dangers from solar radiation management, which aims to reverse climate change, and the unknown long-term health risks from weight-loss injections that are intended to manage obesity but are becoming popular for aesthetic use in non-overweight people as well.