Emerging risks – Complex tasks, creative solutions

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Complex tasks, creative solutions - Munich Re

Complex task, creative solutions

Emerging risks are many and varied. They have their origins in technical developments, in changes to our climate and environment, our society, or to our economy and industry.

Globalisation and the increasing use of information and communication technology are producing ever more complex dependencies. Identifying these complex accumulations requires keeping a watchful eye in all directions. That is why emerging risk management is a highly dynamic process of observation, identification and analysis, driven by a high level of curiosity, a process at the end of which concrete measures are defined.

Our emerging risk think tank acts as a central platform. More than 20 specialists from Munich Re continuously monitor the risk landscape, identifying any new or changing risks. The team includes underwriters, lawyers, geologists, mathematicians, physicists and doctors. The think tank offers scope for less conventional approaches and a wide range of different perspectives. This approach allows our experts to track down scenarios that would have been unthinkable before now and propose measures to manage the risk in question.

Over a dozen emerging risks are undergoing extensive monitoring at any one time. They include topics like demographic trends, climate change, new technologies and IT risks. The emerging risk think tank is assisted by international experts within the Group: the emerging risk community. Its members exchange information and ideas on a regular basis, and provide the think tank with market-specific knowledge.

The emerging risk radar
Munich Re works with the emerging risk radar in order to be able to examine the risks from every possible perspective, while at the same time ensuring the necessary transparency. The various emerging risks are displayed in an interactive graphic. Claims potential, occurrence probability, and its chronological dimension, can be understood at a glance.

With the help of the STEEP analysis (Sociological, Technological, Economical, Enviromental und Political change), the radar divides up the world into five main areas. Emerging risks are then allocated to one of these main areas. Since a risk can often affect several areas, it is always allocated to the segment where it has the greatest impact.

Example IT-/Cyber risks

The example of IT risks in the graphic shows how the radar is interpreted: IT risks are primarily a technical risk, for which there is a direct need for action (position).

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