- Published: Tuesday, June 28, 2022 09:02
Swiss Re has released its 10th annual SONAR Horizon Scan Report. It highlights new risks emerging as the global community grapples with known challenges such as the pandemic, the war in Ukraine, economic turmoil and the erosion of trust in existing social institutions.
Crypto assets and quantum computing create new risks
In today’s technology-heavy financial system, cryptocurrencies such as Bitcoin and Ether have established themselves as potential challengers to traditional currencies. In addition to these new forms of currency, additional cryptoassets have emerged. For example, tokens allow people to purchase digital representations of real assets such as works of art and real estate. They can be traded, granting their owners access to assets, products, or services. Today art lovers can buy a piece of Picasso. Liquid ownership, taxation, regulatory issues and other risks associated with new asset classes pose new challenges for insurers. For example, are certain crypto assets implicitly covered by existing assets or cyber policies?
Security in the new digital financial economy also faces new risks. For example, in quantum computing, new generations of computers are about to complete tasks far beyond the reach of current machines. These ultra-smart technologies offer significant benefits, including advanced weather modeling, advanced medical research capabilities, and financial analysis. As it matures, it can also pose a threat to existing IT security protocols, hacking standard encryption keys used in online communications and data transfers.
A new generation of new risks arising from climate change
Swiss Re identified the threat of climate change as far back as 1979. More than 40 years later, the impacts of climate risks are very much present in our daily lives. More than we already see, climate change is creating new risks for a new generation. This year’s SONAR report found that thawing permafrost covering a quarter of the Northern Hemisphere will not only damage infrastructure and accelerate climate disasters, it will also release disease-carrying pathogens that have been frozen for decades. We are investigating the possibility of release.