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Cyber risks : there will be losses in the long term, says Swiss Re

by

Justine Montminy

30 July 2018 11:30

The cyber risks are among the greatest risks facing insurers in the coming years. It is the finding of the report SONAR 2018 Swiss Re , which examines the emerging risks facing the sector insurance.

According to the reinsurer, some of the flaws and vulnerabilities in hard drives and the software can remain undetectable for a long time. With the arrival of new technologies, it is anticipated that problems could resurface within a few years.

«Algorithms are biased»

Among the risks related to new technologies, Swiss Re believes that some will be related to flaws in the algorithms, which is increasingly used by companies.

«The algorithms are often presented as being objective and non-biased by the humans. However, applications, algorithms are not infallible, since they base their actions on the human judgment. This risk may translate into modeling and predicting defective, which poses a double risk for the insurance, » the report says.

Geopolitical risks

The evolution of a multipolar world, which tends to move the power towards Asia may have an influence on » the relevance of global governance institutions «. These geopolitical changes that would create turbulence, if any, on the financial markets and could threaten the ability of management companies in the world, believes Swiss Re.

The reinsurer also argues that national protectionism and fragmentation to the regulatory jeopardize the benefits of international diversification.

Return of asbestos

Not all the countries that have banned asbestos. The UN estimates that almost a third of Europeans are exposed to asbestos at their workplace or in their daily environment. The re-emergence of asbestos has led to the loss of 100 billion u.s. dollars.

The report SONAR provides an overview of the emerging risks that could have a significant impact on the insurance industry and the company, according to the current trends. «Our report is not to predict the future or to cover all emerging risks, but rather to prepare for probabilities. The more we gain in transparency and the more we will have time to adapt to these risks, » explains the head of risk at Swiss Re, Patrick Raaflaub.

 

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