The International Risk Governance Council usefully defines an emerging risk as belonging to any one of three categories:
1. Risks with uncertain impacts, with uncertainty resulting from new products, services, behaviours or regulation. Current examples include products and processes in nanotechnology or synthetic biology.
2. Risks with systemic impacts, stemming from technological systems with multiple interactions and systemic dependencies. Examples of complex interconnected systems are numerous in energy, transportation, communication, and information technology.
3. Risks with unexpected impacts, where new risks emerge from the use of established technologies, products or processes in evolving environments or contexts.
Casualty insurers face risk across all three categories everyday, often at the same time. Taking asbestos as an historical example: (1) an unstudied substance with unknown impacts (2) was used widely across an interconnected economy, and (3) deployed in numerous and evolving settings. Bisphenol-A is a more recently used substance which Praedicat monitors closely, it having many of the characteristics described above. In a survey of casualty underwriters, 83% agreed that it was their job to protect their company from the next asbestos!
But how does one keep up with the hundreds of thousands of inventions and products created each year?
Praedicat is dedicated to identifying risk in commonplace and innovative technologies, helping companies manage and ultimately insure that risk. Praedicat’s patented technology scans over 28 million scientific articles, curating and quantifying that literature; we use the scientific community as our early warning system, harvesting the data they produce to quantify the state of scientific consensus about ingredients and products.
Emerging risks are issues that are perceived to be potentially significant but which may not be fully understood and assessed, thus not allowing risk management options to be developed with confidence.