The latest edition of Swiss Re’s annual Sonar report says the insurance industry faces a “multi-faceted” emerging risk landscape with political tensions and new technologies all marked as growing threats.  

The reinsurer flags 17 new risks and trends across social, economic, environmental and technological areas in the report as it aims to raise awareness of growing areas of risk and potential disaster.  

“With Sonar, we aim to proactively engage our clients and industry stakeholders in discussion of emerging risks, as we find this is the best way to be prepared,” Swiss Re’s Group Chief Risk Officer Patrick Raaflaub said.  

Swiss Re reports concern over growing tensions between global superpowers over control of sections of the Arctic Ocean that have opened due to melting icecaps, referred to as the “Arctic Opening”.  

The reinsurer says the area’s potential to provide shortcuts for supply lines and create market opportunities has caused countries – such as the US, Canada, Russia and Scandinavian nations – to place a growing priority on authority over the region, setting off a new area of geopolitical tension.   

“The concurrent increases in economic interests, environmental change and geopolitical tensions make the Arctic a hotbed for emerging risks and potential risk accumulation,” Mr Raaflaub said.  

Further worries are also raised over nuclear radiation releases – both intentional and accidental – with the report warning of potential “rippling” effects across multiple lines of businesses. 

Swiss Re also notes concerns over solar radiation management (SRM) technology that aims to reduce the impact of global warming by limiting incoming sunlight.   

The reinsurer acknowledges promising results from the technology to achieve its goal but says unintended consequences of cooling the earth can see cause climate change-like conditions as well as the possibility of climate engineering being used as a weapon.   

“Its utility is to lower temperatures,” Swiss Re said. “However, if implemented and then suddenly terminated, the result of SRM could be fast temperature increases, bringing on related weather effects.”  

Other risks identified in the report highlight an overreliance on machine learning and AI technologies that are susceptible to hacking and other harmful actors, a growing threat of animal diseases, and dangers with the digitalisation of embedded insurance.    

Click here to access the report.