Swiss Re’s 2018 SONAR report was just released which annually examines the emerging risks that the re/insurance industry and society are facing today. There have been shifts since last year and some things are not too surprising, but some that came to the forefront are more so. Many of these emerging risks will be addressed at VCIA’s Annual Conference this August 7th–9th.
Of the top five Swiss Re highlighted, emerging geopolitical risk is a growing concern. Risk managers must be ready to adapt to the possible turmoil in financial markets as power drifts to Asia, democratic influences decline and the relevance of global governance institutions erodes. Additionally, the possible erosion of legal rules could threaten the ability to run global businesses. Combined with the loss of risk diversification and the free flow of capital key to running a global re/insurance business, awareness and flexibility in our industry is paramount. Growing national protectionism and regulatory fragmentation jeopardize the benefits of the international diversification that our industry, and economy, has been built on over the past 50 years.
In the education session at our conference called Economic Headwinds and Tailwinds Impacting Captives, participants will learn about the health of the economy, macroeconomic themes, global monetary policy, the path of central bank policy and the overall direction of interest rates. Special panelist Jeff Carr, President & Senior Economist at Economic & Policy Resources, will lead the discussion. Jeff has more than 35 years of experience in economic analysis, economic and fiscal impact assessment analysis, and economic forecasting. He has served as the consulting State Economist and Principal Tax Revenues Analyst-Forecaster for the past six Governors of Vermont including the current Governor Philip B. Scott.
Also in the Swiss Re report, was the emerging threat of an increasing number of business processes driven by algorithms. Algorithmic applications are not infallible since they base their actions on human judgement as well. Discriminatory bias may also translate into defective modelling and prediction, bringing a two-fold risk to insurance and other industries.
A panel of consultants who work in this space will discuss the growing role of machine learning and analytics in all aspects of insurance business: underwriting, claims, and importantly, displacement and relocation of the risks themselves at our session entitled The Cognitive Captive: Artificial Intelligence for Smarter Insurance. Questions discussed include: How does this affect insurable risks? How have insurance products changed to cope with these emerging technologies? How are insurance companies using artificial intelligence and predictive analytics to improve underwriting results or create a safer workplace? What coverage gaps are being created by the dislocation of risks, or a growing ambiguity about liability for losses caused by software? And how might your captive serve as a problem solver for these market failures? It will be a mind-bendingly fun hour of discussion on topics ranging from self-driving cars to bankruptcy predictions and more.
We look forward to seeing you in Vermont in August. Thank you all very much!