From drones in the sky to ageing infrastructure on the ground, the world is full of risks, and the insurance industry has an opportunity to cover them all, according to Swiss Re.

Its annual SONAR report on emerging threats says “high” risks for the next three years include “super natural catastrophes”, the “great monetary experiment” and “de-globalisation”.

In the longer term, data and the “the Internet of Things” are raised as key issues.

By 2025 a family of four could have more than 100 connected devices, and risks may increase as people become increasingly reliant on data, the report says.

“The Internet of Things has significant potential to challenge entire lines of insurance business.”

Hacking and malfunctions may affect property and casualty (P&C) policies that provide some cover for cyber risks, as well as “pure” cyber products.

Swiss Re says sharing knowledge can help insurers better prepare for and deal with emerging risks, and the industry should provide (re)insurance for new and innovative products.

Other threats highlighted in the report range from bushfires and pandemics to the use of lifestyle drugs and self-tracking tools.

Property risks include “sinking cities”, decaying infrastructure and the rise of vertical cities.

Some coastal cities such as Tokyo and Jakarta are sinking due to groundwater mismanagement or oil and gas extraction, creating potential for large claims in business lines.

“Critical infrastructure in various countries is in bad condition, giving rise to potential for large losses,” the report says. Energy and utilities, transport, technology, food security, social services and healthcare can be affected, and huge investments are now needed to update infrastructure.

“In the US, ageing gas pipes have killed at least 135 people and injured another 600 in the past decade.”

The report says the growth of vertical cities is a particular issue in Asia and the Middle East. High-rise buildings are dependent on elevators, a bottleneck in case of power blackouts or evacuation.

Casualty risks include failures in predictive maintenance for household appliances and other machines, and hydro-fracking fluids leaking into groundwater, potentially causing cancer and birth defects.

The growing use of LED lights has triggered concerns about their impact on eyes and role as sleep disruptors. Even if adverse health effects are rare, the number of injury claims could be high.

In aviation, the increasing use of drones for commercial purposes poses a collision risk to aircraft.

The US Federal Aviation Administration predicts 7500 unmanned craft weighing 25kg or less will operate in the country by 2018.

On the monetary front, uncertain regulation and ongoing low interest rates affect the balance sheets of large, conservative asset managers such as insurers, particularly life insurers, the report says.

In terms of de-globalisation – or protectionist regulation – Swiss Re says financial services have experienced increased intervention in recent years, and a growing compliance burden may constrain the flow of premiums and claim payments.

On the subject of catastrophes, two in particular “are not yet sufficiently taken into account as serious disruptors”: volcanic eruptions and atmospheric river events – corridors of concentrated moisture in the atmosphere.

Last year’s Sonar report warned of plant pathogens threatening rubber trees and tyre production, digital smart cities and malfunctioning technology, food and water scarcity and one-size-fits-all regulation.

This year’s report, which flags 21 emerging risks, may have changed its areas of focus, but the message remains the same: the insurance industry must adapt to stay ahead of the game, otherwise it may be too late.