Munich Reinsurance Group in Australasia

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Munich Reinsurance Group in Australasia

• Emerging Risks .. No worries ?
• Heinrich Eder

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Definition and key characteristics

• Emerging risks The jungle of the unknown
• Developing or changing risks
• Difficult to quantify (frequency / severity)
• Link between cause and effect not proven
• Catastrophe potential across insurance lines and
  balance sheet
• Often long-term exposure
• Driven by social, environmental, economic or
  legal changes

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Emerging Risks Landscape
Source Emerging Risks Initiative
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CRO Forum Emerging Risks Initiative

• Emerging Risk Initiative brings together various
  insurance organisations to examine emerging risks
  for society and the insurance industry. Its goal
  is to
• Raise awareness and promote stakeholder
  dialogue Represent insurance industry voice
• Develop best practice solutions
• Standardise disclosure and share knowledge of
  key emerging risks
• Some of the current Members of the initiative
  include

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Emerging Risks Initiative Top 20

• Pandemics
• Terrorism
• Climate Change
• Nanotechnology
• Electromagnetic Fields (EMF)
• Genetically Modified Organisms
• Asbestos
• Obesity
• Tobacco
• Mould

• 11. Occupational Disease
• 12. Methyl tertiary-butyl ether
• Alcoholic drinks
• Silica
• Welding rods
• Critical Information Infrastructure
• Repetitive Strain Injury
• Implants
• Diacetyl
• Invasion of Privacy

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Nanotechnology
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Nanotechnology

• Nanotechnology science in which new materials
  are built atom by atom or molecule by molecule,
  instead of sculpting parts from pre-existing
  materials.
• Opens a new world of possibilities and product
  opportunities computers clothing cosmetics
  chemicals and cars.
• Insurance - interested in the toxicity and
  unpredictable nature on humans and the
  environment.

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Electro Magnetic Fields EMF / EMR
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Electro Magnetic Fields EMF / EMR

• Electromagnetic fields radiation generated by
  power lines, computers, mobile phones, broadcast
  towers.
• Controversy adverse effects on human body. No
  proof yet.
• Insurance liability arising out of adverse
  effects on human health.

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Obesity
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Obesity

• Obesity condition in which excess fat has
  accumulated in the body.
• Possible consequences serious health and
  illnesses, high blood pressure, stroke, heart
  disease, diabetes and some types of cancer.
• Insurance health, life and non-life.

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Alcoholic drinks / Alcopops
Spot the difference
Source Australian Division of General Practice
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Alcoholic drinks / Alcopops

• Alcopops or designer drinks include alcoholic
  soda drinks (sweet fizzy drinks with alcohol),
  spirit mixers (spirit based drinks), cider/beer
  mixers (cider and beer derivatives) and frozen
  cocktails.
• Young people find alcopops appealing because of
  their sweetness and flavouring which hides the
  taste of alcohol.
• Insurance emerging evidence that alcohol use in
  adolesence can lead to effects on health and
  accident rate.

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Invasion of Privacy / Identity Theft
Credit Cards
VoIP
SearchEngines
GPS
Email
EFTPOS
NetworkingPlatforms
MobilePhones
InternetShopping
CustomerCards
CCTV
MobileMail
Trojans
WLAN
RFID
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Invasion of Privacy / Identity Fraud

• Identity crime - includes both identity fraud and
  theft.
• Identity fraud is one of the fastest growing
  crimes in Australia, costing the community
  between 2 - 3.5 billion per year.
• Insurance liability of programme designers and
  data warehouses.

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Analysing Emerging Risks

• How do we get the knowledge about issues that may
  emerge and either pose a threat to the insurance
  industry or present a new opportunity ?
• How do we deal with emerging issues ?
• How do we become aware of issues at the earliest
  time possible ?
• Early Warning System !

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Early Warning System key to cope with new,
emerging and re-emerging risks
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How do (re)insurers deal with emerging risks ?

• Tools already available include
• Risk assessment and technical underwriting
• Underwriting controls
• Insurance related trend monitoring
• Knowledge management and risk management
• Risk diversification
• Innovative risk mitigation tools

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Munich Reinsurance Group in Australasia

• Thank you