Expecting the unexpected

Game-changing political developments, fake news, artificial intelligence, and climate change are just a few of the big challenging questions for the insurance industry. Leading experts gathered at the Swiss Re Centre for Global Dialogue and discussed how to tackle the risks ahead.

“We do not have fires; we have the end of the West”, stated John Hulsman, Senior Columnist, City AM and President, John C. Hulsman Enterprises. Comparing the standing of the West in today’s world with the demise of The Beatles, Hulsman entertainingly explained why we have to start thinking more broadly and fast, in order to secure the West's standing in a multipolar world.

Hostile governments using social media to disrupt elections as well as fake news duping consumers and challenging business were addressed by Frank Sesno, Director, School of Media & Public Affairs at George Washington University. The former CNN Anchor and Washington Bureau Chief stressed the importance of thorough fact checking to mitigate the risk of misinformation and manipulation.

Additional conflicts and isolation

Ben Nimmo, Senior Fellow for Information Defense at the Atlantic Council’s Digital Forensic Research Lab, spoke about the rise of populism and nationalism paired with hyper-partisan campaigning, warning that the world is likely to see more conflict within societies and a retreat into isolation.

During the following panel discussion on political and societal risks, the speakers stressed the importance of efficiently processing the quantity of information available. Listening and engaging in a mutual dialogue, especially paying attention to the emotional side, were seen as key to counter the erosion of trust that institutions and big companies are facing nowadays.  

Challenging new technologies

The role of technology in risk was widely discussed after lunch. In five interactive breakout sessions, experts talked, among other topics, about the opportunities and risks of liquid biopsies, wearables, digital identity and sensitive data on blockchains, chatbots and autonomous machines.

Christian Mumenthaler, Group CEO, Swiss Re, shared his views on insurance of the future. While some technologies will definitely impact the value chain, challenges, like handling data in the light of new data protection laws also need to be addressed.

Courtney Bowman, Head of Privacy and the Civil Liberties Engineering Team at Palantir Technologies, spoke about the overwhelming temptation to exploit the novel data landscape and the importance of ethical underwriting.

Shannon Vallor, Professor of Philosophy at Santa Clara University explained why she sees artificial intelligence as a “powerful accelerant of beneficial and of destructive or destabilizing socioeconomic forces”. Quick, broad and wise reforms are required to tip the balance in humanity’s favour.

Smart cities, digitalization and climate change

Norbert Ender, Smart Cities Executive, IBM Switzerland, kicked off day two of the conference by providing insight into the concept of smart cities and the potential risks and challenges for re/insurance companies. While smart technologies offer the potential to dramatically reduce health, as well as property-related risks, they also bear data privacy or increased liability exposure risks.

A fascinating overview of how climate change impacts health, especially the spread of pathogens, was presented by Kacey Ernst, Professor of Epidemiology and Biostatistics at the University of Arizona. She was followed by Christina Kehl, Managing Director & Board Member at Swiss Finance Startups, who warned insurers not to shy away from digitalization. She noted that customers are pushing for digitalized products and services. Therefore, insurers should redefine their business model to profit from the opportunities digitalization will offer in the future.

Given the emerging risks, new risks and technologies, and changing lifestyles, Walter Kielholz, Chairman of the Board at Swiss Re, explained that it is the board’s duty to at least try to categorize the risk universe and to ensure the various risks are analyzed accordingly. Therefore, board members are required to have specific knowledge to understand the nature of risks and be able to anticipate black swans before they materialize.

Summary of the 13th CRO Assembly in November 2017. Summary written by Mona Fahmy.