Swiss Re’s annual Sonar report on emerging risks has warned the COVID-19 pandemic should not overshadow the need to move to a low-carbon future.

“Adaptation to climate risks and the transition to a low-carbon economy with related opportunities and risks for the insurance industry remain crucial,” Chief Risk Officer Patrick Raaflaub says.

“In the wake of COVID-19 the public and private sectors must focus on both global health and climate change.”

The report, which has been published each year since 2013, highlights 14 emerging risk themes, grouped by potential impact, timeframe and category, and spotlights four longer-term trends.

Intergenerational imbalances are ranked as high-risk within three years, with millennials hard-hit by the pandemic just as they are building their personal and professional lives and would typically require more insurance.

Increased cyber risks may come from “edge computing”, involving devices at the end of a network such as with the Internet of Things, which allows more points for disruption while increasing the potential for failures.

Carbon removal solutions will generate demand for traditional engineering and property insurance covers, which would include new types of risks, while some technologies are still at the prototype stage.

Technological and natural environment risks also include challenges from the combustibility of lithium-ion batteries and hydrogen fuel applications.

Mr Raaflaub says the current coronavirus crisis has shown the importance of forward-looking risk management.

“Maintaining global dialogue on evolving exposures and trends will help us best prepare for the future risk landscape,” he says.

See ANALYSIS.