10th anniversary SONAR report covers 14 emerging risks topics across technological, economic, social and environmental areas.
We live in a world where billionaires can take day trips into the stratosphere, crypto assets are challenging established financial norms and climate change is changing the very substance of our physical environment. New risks are arising while the global community deals with known challenges such as the pandemic, war in Ukraine, economic turbulence and failing trust in established social institutions. Swiss Re’s SONAR report, now celebrating its 10th anniversary, scans the horizon for emerging risks for the insurance industry.
In the current highly technology-dependent financial system, cryptocurrencies such as Bitcoin and Ether have established themselves as potential challengers to conventional currencies. Alongside these new forms of currency, further crypto assets have emerged. Tokens, for example, allow people to buy digital representations of real assets such as art works or real estate. They can be traded and grant their owner access to assets, products or services.
La seguridad de la nueva economía financiera digital también se enfrenta a nuevos riesgos. Con la computación cuántica, por The security of the new digital financial economy is also facing new risks. With quantum computing, for example, a new generation of computers is on the verge of completing tasks far beyond the reach of current machines. These hyper-smart technologies offer significant benefits: sophisticated weather modelling, advanced medical research capabilities and financial analysis
Swiss Re identified the threat of climate change as far back as 1979. More than 40 years later, the consequences of climate risk are very much present in our everyday lives. Beyond what we already see, climate change creates a new generation of emerging risks. This year’s SONAR report explores how the thawing of permafrost, which covers a quarter of the northern hemisphere, could not only damage infrastructure and accelerate climate hazards but also release disease-carrying pathogens that have been frozen for decades.
Agriculture is an activity that is especially susceptible to climate change – yet it is also an area that is struggling to reduce its contribution to global warming. Emissions from global food production account for about 31% of total man-made carbon emissions.
The challenge for agriculture is to improve productivity and feed more people while cutting emissions at the same time. Insurers can play a vital role in faster adoption and scaling up of sustainable farming practices by offering suitable coverage solutions and facilitating climate-smart and regenerative agriculture.
There was a time when today’s big challenges such as climate change, pandemics, geopolitical conflict and inflation were themselves emerging risks. SONAR’s 10th anniversary edition is a poignant reminder of the long-term potential of emerging risks and how the insurance industry helps to build societal resilience.