Every year since 2011, Risk & Insurance® editors and writers have set about determining the Most Dangerous Emerging Risks for a package that runs in our April issue. As we’ve monitored which risks have the potential to cause the most damage, one thing is becoming apparent: Most Dangerous Emerging Risks seem to be emerging at a faster and faster rate. Just last year, we wrote about the risk that a populace that self-selects information sources, relying mostly on
unsubstantiated sources on the internet, could come to erroneous conclusions,
with dangerous consequences.
We called that story “Fragmented Voice of Authority.”
Fearful proof of that premise came to life in December when a gunman shot
up a pizza parlor in Washington, D.C., after reading bogus information on the
internet that former Secretary of State Hillary Clinton was running a child sex
ring there. Fortunately, no one was injured in that incident.
Now it looks like fake news stories emanating from Russia could have played
an interfering role in our Presidential election.
Another focus of last year’s issue was our crumbling infrastructure. That topic
received terrifying confirmation when heavy rainfalls pushed California’s aged
Oroville Dam to the bursting point. Should the dam break, billions in real estate
losses as well as potential loss of life would result.
That April 2016 story, titled “Crumbling Infrastructure: Day of Reckoning,”
warned that we now face the consequences for too long foregoing spending on
important infrastructure upgrades.
We’ve seen that Most Dangerous Emerging Risks can take years to develop
and emerge. But in both of these cases, they emerged in a matter of months.
The process of determining the Most Dangerous Emerging Risks begins in
January, when we start placing calls to insurance carriers, risk modelers and brokers.
We ask executives with those companies to engage us in an off-the-record
conversation about which risks concern them the most. A defining characteristic
of a Most Dangerous Emerging Risk is that it has the potential to cause
widespread losses, but might not be on the radar of many risk managers.
Once we pick the brains of industry executives, we compile a list of the risks
that look like they could qualify as Most Dangerous Emerging Risks. The editors
then meet to determine which of those risks we should focus on for the April
issue. It’s at that stage that we go back to our original sources, and if we picked one
of their stories, ask them for an on-the-record interview on the topic.
This year, after distilling our conversations with our sources, we came up with five
emerging risks that could cause massive losses for commercial insureds and carriers.
The risk that sea rise could wreck coastal real estate values is one. Economic
nationalism, both domestically and globally, are two and three.
The layered risk presented by the use of artificial intelligence in
manufacturing and other processes is our fourth most dangerous emerging risk
this year, and the threat that hackers could take down the internet and cause
massive cyber business interruption is number five.
Experts say that trillions in property values could literally be underwater due
to sea rise in the next mortgage cycle, or the next 30 years.
Hopes are that public and private sector stakeholders can pull together to
devote the thought and the resources necessary to create the infrastructure
necessary to protect our ports, our office buildings and our homes from sea rise.
China is doing it and we should too. That story begins on page 46.
The risk that many find most concerning is the fear that a hack could take
down the internet. Business interruption for that kind of event would be so
widespread that insurers just can’t cover it.
Check out managing editor Anne Freedman’s story on that risk on page 42.
Protectionism is on the rise in this country. Politicians that want to firm up
our borders represent a threat to supply chains and the free flow of commerce.
The U.S. tech industry, in particular, fears a talent shortage should the new
administration’s efforts to limit immigration become law. Associate editor Katie
Siegel’s piece on page 34 details that risk and others that stem from domestic
The fear for multinational companies, according to a story on page 38 by
staff writer Juliann Walsh, is that global business uncertainty will increase
unduly; prompted by events such as Britain’s vote to leave the European Union
and Venezuela’s decision to close its borders with Brazil.
Associate editor Michelle Kerr’s piece looking at the tangle of liability
questions created by artificial intelligence begins on the opposite page.
Our award-winning Most Dangerous Emerging Risks coverage is, of course,
intended not to scare people but to advance the thought leadership and dialogue
we need to mitigate risk and ensure a more resilient, sustainable economy.
On that point, we can all agree. &
DAN REYNOLDS is editor-in-chief of Risk & Insurance. He can be reached at dreynolds@
By Dan Reynolds
2017 MOST DANGEROUS