WEF working group examines emerging tech risk
A disruption of cloud systems could cause losses of $US15.6-$US121.4 billion ($19.77-$153.92 billion), with an insurance gap as high as 83%, insurers estimate.
Similarly, a cyber attack on the US northeast electrical grid could result in economic losses as high as $US222 billion ($281.47 billion).
These and other alarming projections have led insurance groups to join a World Economic Forum-led working group, called Mitigating Risks in the Innovation Economy.
The forum comprises Allianz, Lloyd’s, Marsh & McLennan, Sompo Holdings, Swiss Re, Willis Towers Watson, XL Catlin, Zurich, technology companies Cisco, Hitachi, IBM and Siemens, plus senior government officials from around the world.
It will attempt to close the gap in governance frameworks to manage risks from innovations, determine liabilities, roles and responsibilities, and set up a data-sharing mechanism to manage the risks.
Project leader Victoria Shirazi says the risk exposure to new, uninsured technologies is unknown.
“A technology failure that was once both small and contained can cascade into potentially catastrophic losses,” she said. “This initiative will help societies prevent, respond to and recover from these new risks.”
A compromised software upgrade for globally interconnected systems could put $US4.5-$US15 trillion ($5.7-$19.01 trillion) of global GDP at risk over five years, it is estimated.
Lloyd’s CEO Inga Beale says as technologies emerge, the risks become so big and complex that businesses and government will not cope.
“With this initiative, we want to address that,” she said.
The working group has committed to further multi-stakeholder actions, to be developed and piloted next year, starting at the World Economic Forum annual meeting in January.