SONAR 2024: New emerging risk insights

Evolving geopolitical conflict and infrastructure funding gaps are increasing the risk of supply chain disruptions. Governments are spending more on the military, which is curtailing budgets for civil infrastructure. Supply chains are becoming less resilient to shocks as cost reduction is taking centre stage again.

Persistent inflation pressures households, business, and government budgets around the world. Rising prices and funding gaps in healthcare are prolonging the stresses on care services that the pandemic exposed. Demand for healthcare is going up and changing as societies age, often outstripping supply. Affordable healthcare is a growing challenge, as well as social inequality and health disparities. The rise of FemTech, a female health technology sector, is helping to address the gender gap in healthcare but also brings new risks.

One in four adults and at least 5-15% of adolescents experience insufficient social contact and feelings of loneliness. This "epidemic of loneliness" is linked to diminished health prospects. Another rising health concern is the micro-dosing of psychedelic drugs or stacking up prescription drugs with performance boosters by adults in the workplace.

Climate risks threaten societies and economies. 2023 was the hottest year on record with climate change shifting the frequency and severity of some natural hazards, resulting in higher economic losses, including from broken infrastructure, for certain perils, such as flood and hail. Climate change may also drive food and water shortages and in turn civil unrest, and mass migration, which could destabilise societies and international political relations.

The transition to a low-carbon economy comes with new challenges, such as competition for space and resources for green energy infrastructure, and handling of end-of-life green technologies and associated recycling processes. The hunger for critical minerals also fuels deep-sea mining projects that threaten maritime ecosystems and natural carbon storage.

Digital innovation spurs cyber risk and dependency on Big Tech. The power of digital platforms and communication networks to infiltrate all venues of life is reflected in social media democratising financial information and shaping decision-making, which can impact financial market volatility. The rise of artificial intelligence comes with many opportunities and challenges for insurance business and related operations, such as cyber and fraud risk, compliance, and regulation, and Environmental, Social and Governance requirements.