Swiss Re ahead of the curve in charting emerging risk

Swiss Re has built up an innovative methodology to charting emerging risks called SONAR (“systematic observation of notions associated with risk”). Thinking in scenarios plays a crucial role in this analytical approach. These scenarios can be understood as rigorously conducted thought experiments on possible future situations.

By setting out possible future states of the world in a disciplined way, scenarios support attempts to “think the unthinkable.” Instead of judging potential future outcomes based purely on past experience, the scenario approach shifts the question from “Will this future event occur?” to “If this event occurred what would the possible outcomes be?”

For example, we were among the first companies to address potential nanotechnology risks (link to nanotechnology stories). A cross-disciplinary SONAR project team was set up to define and quantify possible risks associated with nanomaterials that might exhibit unexpected, novel properties threatening human health or our environment.

The team asked questions such as, “What if nanoscale asbestos-like compounds become airborne and enter the human body? Can nanoparticles cause long-tail health effects that could impact our lines of business?” While nanotechnology is a booming market with enormous potential, the challenge to (re)insurers is to provide effective protection against possible – and as yet insufficiently recognised – downside impacts.

Identifying emerging risks

Reinsurers today are operating in a risk landscape that is shifting ever more rapidly. Charting emerging risks and opportunities in a pre-emptive way is an important element of Swiss Re’s integrated...

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From emerging risk to core business:...

We first drew attention to "cyber attacks" as an emerging risk by including a case study in our 2011 Corporate Responsibility Report. At the time we focused on risks potentially created for Supervisory...

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