Insurance is a data-driven industry. And access to reliable data can make the difference between understanding a risk or being caught off guard, between an opportune advantage or a missed opportunity.
With this in mind, we examine three emerging risks: what we know–and don’t know–about a possible large-scale space weather catastrophe, the impressive diagnostic abilities of quantum sensors, and the sobering realities and potential liabilities of digital addiction.
A Space Weather Event for the Ages?
Could America’s power grid withstand a once-in-a-century space storm?
Researchers and federal regulators are somewhat limited by data availability from past precedent, such as the 1859 Carrington Event. That solar storm was said to be so powerful that it set the night sky alight and disrupted telegraphic systems around the world.
Scientists suggest that even more powerful solar phenomena–called extreme solar events–might be possible on a star like the sun. Two types of extreme solar events keep experts up at night: superflares and extreme solar particle events.
A superflare could deliver a radiation punch to our planet 100 times greater than that of the Carrington Event, potentially disrupting (or even destroying) parts of the electrical grid, knocking satellites out of orbit, and causing radio blackouts around the globe. Scientific estimates on the frequency of a potential superflare event vary: some suggest it could be a once-a-millennia event, while others believe one might occur once every 400 to 2,400 years.
Extreme solar particle events prompted by solar flares and coronal mass ejections–an explosive dose of solar plasma and magnetic field from the sun’s outer atmosphere–can send waves of highly energized protons toward the Earth’s surface, potentially depleting ozone and elevating global radiation levels.
Regarding the electric grid, factors such as the geological composition below grid infrastructure are expected to play a major role in the location of possible damage. Given the size and intensity of solar events, we can reasonably suspect that a superflare might be even more disruptive than a Carrington-sized event.
A Quantum Leap
While debate rages about when quantum computers will overtake their classical counterparts, quantum sensors have already arrived. This novel technology holds a number of promising applications for the insurance industry, from improved natural disaster monitoring to autonomous vehicle navigation to critical infrastructure monitoring.
Quantum sensing is a broad category with technology that several industries could leverage. For example, certain quantum sensors can identify corrosion and leaks, precisely monitor greenhouse gas emissions, and map underground areas.
Quantum sensors are extremely responsive and can detect minuscule changes in pressure, frequency, acceleration, rotation, magnetic fields, and more. They can even “hear” when cracks start to form in certain materials. Quantum sensors’ high degree of sensitivity means they can perform complex geological surveys that are particularly valuable in the energy, construction, and geoengineering sectors.
For insurers, these capabilities can help reduce risks. For example, quantum sensors may be able to detect oil and gas pipeline leaks and identify steel corrosion in bridges earlier than traditional systems.
Additionally, as autonomous trucking advances, these sensors can help properly space commercial truck platoons and identify leaks and corrosion on the vehicles.
Although quantum sensing is the most mature quantum technology, different models remain in various stages of development.
Algorithmic Addiction
Digital addiction isn’t recognized as an official disorder; nevertheless, there has been a wave in recent years of personal injury and product liability lawsuits against numerous companies involved in the social media, video game, chatbot, and online dating app marketplaces, raising potential liability and coverage concerns for insurers.
An emerging medical consensus appears to be building around digital addiction. The American Psychiatric Association, for instance, has identified a variety of so-called technology addictions that “can lead to negative consequences in various aspects of an individual’s life.”
Mental health experts and organizations have flagged a variety of potential digital addiction health risks, among them being a heightened risk of suicide among individuals already suffering from depression, increased risk of obesity, sleep loss, and potentially harmful alterations to the structure and function of children’s brains.
Litigation related to digital addiction has included a class action against a company that develops online and app-based dating platforms, alleging they were intentionally built with “addictive, game-like design features.” Another suit, filed late last year, alleges that a generative AI chatbot developer launched a product they knew was dangerous and marketed it toward children. The complaint includes claims of wrongful death and product liability.
It’s worth keeping an eye on the influx of digital addiction lawsuits and their potential implications for liability insurers. Meanwhile, the possibility of a catastrophic space storm and the potential of quantum sensors illustrate the spectrum of emerging issues in the evolving risk landscape.
Shavel is president and chief executive officer of Verisk, a data analytics and technology partner to the global insurance industry. He brings nearly 30 years of experience advising and leading publicly traded companies to Verisk.
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