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FROM THE EDITOR
Compiled by staff from news and wire services.
Acceleration of Risk
Arsonists know that if they really
want to burn down a house or a
barn, a ready match is not all they
need. No; to really get the job done
they use an accelerant, a nice fat
can of gasoline or, at least, an oil-soaked rag.
As we observe and report on the
Most Dangerous Emerging Risks
for 2018, the same dynamic springs
to mind. The fuel, to use our arson
analogy, already exists, but factors are
culminating that accelerate the risk.
Take reputational risk and its risk
multipliers. Reputation was always
important and maintaining it was
But now, to use the language
of one of our sources, reputational
damage descends tornado-like, such
is the speed at which social media can
sow outrage and reap punishment.
Look also at our crumbling
infrastructure. The risk that a
storm would wipe out a bridge and
thus shut down a coastal hotel or
restaurant’s business for weeks was
Now add our changing planet
and the fact that our storms are
growing more powerful. The risk is
accelerating like a CAT- 5 bearing
down on Miami.
The good news may be that just as
technology in many cases accelerates
the risk, it also gives us the foot speed
to mitigate the risk.
The capability of creating
algorithms that can sniff out a
cyber attack or a reputation threat
represents that kind of hope.
In any event and in any industry,
it’s not that the risk has a whole new
face, it’s that it is coming at you at a
speed you never imagined before.
RIMS RISK MANAGER OF THE YEAR
Rebecca Cady, vice president and chief
risk officer, the Children’s National
Medical Center (CNMC), is the 2018
RIMS Risk Manager of the Year.
The Risk Manager of the Year
program was introduced in 1977, with
the goal of raising awareness of the risk
management profession. Honorees are
selected based on their performance,
outstanding programs they’ve initiated
and overall merits as a risk manager.
Cady is responsible for CNMC’s
enterprise risk management
department, the management
of its litigation program and the
operationalization of its clinical risk
management program. Starting out,
she encountered an excess of 10,000
incident reports each year. Cady
worked to update CNMC’s antiquated
event reporting software, which
contributed to a net positive movement
on reserves of more than $100 million
in the last five years.
CONTINUED DISTRACTED DRIVING
Technologies specifically designed to
promote safe driving are shown to add
to distracted driving, reports Esurance
High-tech cars featuring lane
departure warning or automatic
braking give drivers a false sense of
security. While 91 percent of drivers
admit texting while driving is a
distraction, 53 percent admit to doing
it despite the risk of an accident.
In the survey, 21 percent of drivers
who have this semi-autonomous
tech in their car said they often felt
distracted by texting, emails, talking on
the phone or viewing GPS navigation.
Yet they still do it while driving. Forty-
Despite the dangers, people are still
six percent of drivers reported that the
tech improves their driving, while 10
percent believed the opposite.
THE COST OF GUN VIOLENCE
In January, two students were shot and
killed while 18 remained in critical
condition after a gunman rained
bullets down on an unsuspecting high
school in Kentucky. A month later,
17 students and faculty were killed
when a gunman entered a Florida
high school; 18 school shootings were
logged in the first two months of 2018.
The monetary cost of such events
pales in comparison to lives lost, but it
still affects the role of insurance in the
aftermath. Annual gun violence costs
the U.S. roughly $229 billion per year,
according to Mother Jones, a nonprofit
news organization. A study released by
Health Affairs estimated $2.8 billion
goes toward hospital charges alone and
does not include extended treatment or
For schools and businesses,
commercial liability policies cover
some property damage. Business
interruption insurance might cover
extended periods of shutdown. But
these are just the start: workers’ comp
claims, lawsuits and litigation, PTSD
and mental health claims, reputation
and more rack up costs following a
CANNABIS SURETY BOND PROGRAM
California’s insurance commissioner,
Dave Jones, announced the approval
of the state’s first surety bond program
for the cannabis industry. Medical
marijuana was legalized in the state in
1996; recreational marijuana in 2016.
Continental Heritage Insurance
Company will be the first insurer to
offer such bonds.
Jones began the initiative to
encourage commercial insurance
coverages for cannabis last year,
holding the first-ever public hearing
to identify insurance gaps faced by the
cannabis industry. They learned no
commercial carriers were writing for
Jones conducted education sessions
to help insurers understand the risks
the cannabis industry faced while
also setting up meetings between
commercial insurance professionals
and cannabis business owners.
CLIMATE CHANGE SPARKS TRAVEL
2017 was recorded as the second
hottest year in modern human history,
and climate change is leading to some
scary events, including higher rates of
natural disasters, coastal cities sinking
into the ocean and water disparity so
vast, towns shut off their water supply.
But there is a silver lining for one
group: travel insurance. With many
dream destinations threatened by
climate change, travelers are seeking
out their “last chance” destination
spots more frequently. Squaremouth,
a database that compares travel
insurance coverages, monitored key
destination spots for more than 15
years, starting in 2003. Countries
most affected by climate change see
a significant increase in travelers and,
therefore, travel insurance sales.
Australia, for instance, has seen a
25 percent increase in visitors. Their
largest coral reef systems are at risk due
to global warming. Visitors are willing
to spend 28 percent more to see them
before they are gone.