Swiss Re Institute’s 2023 SONAR report has highlighted malicious attacks on artificial intelligence systems and potential clashes over new trading routes in the Arctic as possible threats as the risk landscape continues to burgeon.
Swiss Re’s 2023 SONAR report covers 17 new risks and trends across technological, economic, social and environmental areas.
One key emerging risk identified in the report is the potential geo-political issue that may stem from the “Arctic opening”.
“As the Arctic Ocean and adjacent land are warming up two to three times faster than the rest of the globe, the ice is melting, and new shortcut shipping routes are opening up,” explains Swiss Re.
The reinsurer suggests that the area is a “hotspot for potential geopolitical tension”, and provokes concern over how economic activities and related risks will be controlled in the region.
Patrick Raaflaub, Swiss Re’s Group Chief Risk Officer, commented, “The concurrent increases in economic interests, environmental change and geopolitical tensions make the Arctic a hotbed for emerging risks and potential risk accumulation.”
“With SONAR, we aim to proactively engage our clients and industry stakeholders in discussion of emerging risks, as we find this is the best way to be prepared.”
Meanwhile, in what Swiss Re describes as a “more futuristic but potentially significant risk”, the report highlights solar radiation management (SRM) technology, which could be used to cool the earth.
Swiss Re writes, “While this does not address the root cause of global warming, namely greenhouse gas emissions, it could help lower global temperatures.
“However, techniques such as injecting highly reflective particles into the atmosphere to reflect sunlight back into space could open up a whole new set of environmental risks and the potential for international conflicts.”
The firm continues, “If implemented and then suddenly terminated, the result of SRM could be fast temperature increases, bringing on related weather effects.
“It could lead to an increase or geographical shift of extreme weather events like droughts or hurricanes. The question would be how to compensate those experiencing negative effects.”
Another emerging risk in the technology space could derive from complex machine learning systems and AI.
Swiss Re suggests that professional hackers can not only trick models into making mistakes or leaking information, but they can also harm model performance by corrupting training data or stealing and extracting machine learning models.
The firm’s SONAR report emphasises how the rise of AI is increasing opportunities for fraud and intellectual property loss, such as phoney creditworthiness ratings or false insurance scores.
The reinsurer states, “In car insurance, AI-based claims management systems may even be tricked into seeing massive damage where there is none.
“If AI gets hacked, it could even result in physical harm by causing autonomous car crashes or medical misdiagnoses.”
