Several insurance, reinsurance and broking heavyweights sign up to initiative
The World Economic Forum (WEF) has today launched a new coalition to address the potentially catastrophic fallout of uninsured risk associated with the Fourth Industrial Revolution (4IR).
The initiative, ‘Mitigating Risk in the Innovation Economy’, bring together technology companies and government representatives, and participants from the insurance, reinsurance and broking sectors – including Allianz, Lloyd’s, Marsh & McLennan, Sompo Holdings, Swiss Re, Willis Towers Watson, XL Catlin and Zurich Insurance Group.
Victoria Shirazi, WEF lead for the Mitigating Risk in the Innovation Economy project, outlined that the current risk exposure associated with drones, driverless cars and other innovations associated with 4IR was still unknown, saying: “No one currently knows the magnitude of the risk exposure of society to new, uninsured technologies. A technology failure that was once both small and contained can cascade into potentially catastrophic losses.
According to research from those involved from the (re)insurance industry, there are vastly varying estimates regarding potential losses, with estimates for economic losses of a cyber-attack on the US Northeast electrical grid reaching $222bn. The estimated range for economic losses for a disruption of the cloud was $15.6bn to $121.4bn.
Lloyd’s chief executive Inga Beale, a backer of the initiative, said: “As technologies emerge on their own, the risks are becoming so big and complex that businesses and governments will not be able to handle them. With this initiative, we want to address that.”
Shirazi added: “This initiative will help societies prevent, respond to and recover from these new risks.”
In today’s launch, the working group laid out the risks and goals, including:
- Closing the gap in existing governance frameworks to manage risks from innovations;
- Determining the liabilities, roles and responsibilities involved with these risks;
- Setting up a data-sharing mechanism to manage the risks.
The members of this initiative committed to further multi-stakeholder actions to be developed and piloted in 2018.