Swiss Re identifies 16 emerging insurance risks

Its latest report warns that the majority of these risks are becoming more intertwined.

Swiss Re warns of 16 emerging risks with huge potential to impact the insurance industry. Key risks include the continuous effects of natural disasters, the weakening resilience of supply chains and the repercussions of persistent underfunding of healthcare systems

Swiss Re’s 12th SONAR emerging risk report reveals that the world is grappling with multiple interconnected crises, leading to increasingly complex risks. The report examines critical future topics to enhance understanding of emerging risks and their dependencies.

"For re/insurers, it is key to anticipate trends and understand how major global issues such as climate change, economic uncertainty or geopolitical turmoil could impact not only the industry but also society as a whole." Patrick Raaflaub, Swiss Re Group chief risk officer, said in a press release. 

Weather-related natural catastrophes, like floods, wildfires, and storms, are becoming more frequent and severe. These events can cause property damage and loss of life, but their cascading effects pose additional risks. 

For instance, wildfires can contaminate water sources, and floods and storms can damage energy grids and disrupt transport networks, halting production and causing significant economic damage.

Whilst companies prioritised supply chain security after COVID-19 disruptions, the focus has shifted back to cost savings despite growing risks. 

Geopolitical volatility, extreme weather events, economic uncertainty, and rising cyber and technology risks threaten key global supply routes. Given the current situation, companies should prioritise supply chain resilience to mitigate potential economic fallout from compounded risks.

Climate change and supply chain issues also strain healthcare infrastructure, exacerbated by consistent underfunding. Essential services like water, sanitation, and electricity may be compromised under extreme climate scenarios, leading to more frequent disruptions.

Weakened health services increase societal risks, with inadequate care contributing to higher morbidity and mortality, impacting economies through health-related absenteeism and understaffing. This concern spans low-, middle-, and high-income countries.